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In an Effort to Analyze Clockwork Company Finances, Jim Realized

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Essay

In an effort to analyze Clockwork Company finances, Jim realized that he was missing the company's net profits after taxes for the current year. Find the company's net profits after taxes using the following information.
Return on total assets = 2%
Total Asset Turnover = 0.5
Cost of Goods Sold = $105,000
Gross Profit Margin = 0.30


Definitions:

Prepaid Expenses

Payments made in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are consumed or used.

Indirect Method

A method of presenting the operating activities section of the statement of cash flows that adjusts net income to compute cash flows from operating activities.

Net Income

The net income of a company, which is the remaining amount of total revenue after deducting all expenses and taxes.

Inventory

The total amount of goods and materials held by a company intended for sale or production.

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