Use the Table for the Question(s)below

question 116

Multiple Choice

Use the table for the question(s) below.
Income Statement for Xenon Manufacturing:

-Consider the above Income Statement for Xenon Manufacturing.All values are in millions of dollars.Calculate the gross margin for 2014 and 2015.What does the change in the net profit margin between these two years imply about the company?

• A)The efficiency of Xenon Manufacturing has significantly risen between 2014 and 2015.
• B)The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them rose between 2014 and 2015.
• C)The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them fell between 2014 and 2015.
• D)The leverage of Xenon Manufacturing fell slightly between 2014 and 2015.
• E)The revenues available to equity holders fell slightly between 2014 and 2015.

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Definitions:

Prepaid Interest

Interest payments made in advance of their due date, typically associated with the initial costs of obtaining a mortgage.

Recurring Cost

Expenses that occur at regular intervals, such as monthly rent or annual subscriptions.

Back-end Ratio

The back-end ratio measures a person's total debt payments as a percentage of their income, commonly used by lenders to assess borrowing capacity.

Pre-approved

An initial approval indicating a customer may qualify for certain loans or credit cards, usually based on a preliminary credit information review.