Montana Company Reported the Following Operating Results for 2013 and 2014

question 53

Essay

Montana Company reported the following operating results for 2013 and 2014:
$\begin{array}{|l|r|c|}\hline 2014 &{\text { Amount }} & \% \text { of Sales } \\\hline \text { Sales } & \$ 960,000 & \\\hline \text { Cost of goods sold } & 635,000 & \\\hline \text { Gross margin } & 325,000 \\\hline \text { Operating expenses } & 275,000 \\\hline \text { Income before taxes } & 50,000 \\\hline \text { Income taxes } & 15,000 \\\hline \text { Net income } & \$ \quad 35,000 \\\hline\end{array}$
Required:
Express each income statement component for each year as a percentage of sales. Round your answer to one decimal place (i.e. 22.5%)

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Definitions:

Small Business

Refers to privately owned corporations, partnerships, or sole proprietorships with fewer employees and less annual revenue than a regular-sized business.

Business Failure

The cessation of operations and the inability of a company to continue financial performance due to various factors such as poor management or market conditions.

Receivership

A legal process in which a court appoints a receiver to manage the assets and business operations of a company that is in financial distress.

Pharmaceutical Company

A business entity focused on the research, development, production, and marketing of medications and medical treatments.