Complete the Following Statement of Earnings (Both Dollar Amounts and Component

question 165

Essay

Complete the following statement of earnings (both dollar amounts and component percentages): $$\begin{array} { | l | r | r | } \hline & \text { Amount } & \text { Component percentage } \\\hline \text { Sales revenue } & \$&\% \\\hline \text { Cost of goods sold } & & 40 \% \\\hline \text { Gross margin } &\$ 120,000 & \\ \hline \text { Operating expenses } & & \\\hline \text { Interest expense } & & 2 \%\\\hline \text { Profit (before income tax) } & & \\\hline \text { Income tax expense (rate 20\%) } & & \\\hline \text { Profit } & & 6 \% \\ \hline\end{array}$$

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Definitions:

Arbitrage Pricing Theory

A theory that designs to predict the price of assets by considering the relationship between a financial asset's returns and the macroeconomic factors that directly affect it.

Expected Return

The anticipated value or profit generated by an investment over a given period, factoring in all potential outcomes and their probabilities.

Systematic Risk

The danger that affects all investments within an entire market or a specific sector, commonly referred to as market risk or non-diversifiable risk.

Treasury Bills

Short-term government securities issued at a discount from the par value and pay no interest.