Questions: A firm reported the following income statement (all figures are in thousands of dollars): Net Sales 1,220 - operating costs 200 - depreciation amortization 245 = Operating Income (EBIT) ? - interest 115 = Earnings Before Taxes (EBT) ? - taxes 84 = Net Income ? What is the net income of this firm?

To calculate the net income of the firm, we need to follow the steps of the income statement and fill in the missing values.

1. Calculate Operating Income (EBIT): \[ \text{Operating Income (EBIT)} = \text{Net Sales} - \text{Operating Costs} - \text{Depreciation \& Amortization} \] \[ \text{Operating Income (EBIT)} = 1,220 - 200 - 245 = 775 \]

2. Calculate Earnings Before Taxes (EBT): \[ \text{Earnings Before Taxes (EBT)} = \text{Operating Income (EBIT)} - \text{Interest} \] \[ \text{Earnings Before Taxes (EBT)} = 775 - 115 = 660 \]

3. Calculate Net Income: \[ \text{Net Income} = \text{Earnings Before Taxes (EBT)} - \text{Taxes} \] \[ \text{Net Income} = 660 - 84 = 576 \]

Therefore, the net income of the firm is $576,000.

The net income is 576.

• Operating Income (EBIT): Calculated by subtracting operating costs and depreciation & amortization from net sales.
• Earnings Before Taxes (EBT): Found by subtracting interest from EBIT.
• Net Income: Determined by subtracting taxes from EBT.