00:01
In this example, we're giving different variables and trying to analyze what different metrics are within our statements.
00:08
We're given sales of $200 ,000, telling us that this was for 10 ,000 units.
00:15
We have a contribution margin ratio of 45 % and a net operating income of $10 ,000.
00:23
To figure out these next lines, i really need to start to try to make an income statement.
00:29
And we can make a very simple messy one.
00:32
We're not making a formal income statement here.
00:34
We're just trying to get to the totals that we need to get.
00:38
We have sales of $200 ,000.
00:45
From sales, you always subtract cost of goods sold to get to your gross profit, which we don't know what either of those are yet.
00:58
Now, what we do know is the gross profit is the same as the contribution margin.
01:05
And the contribution margin is a ratio of 45.
01:08
That means it is 45 % of sales.
01:13
So if i take sales and multiply it by 45%, i will get that my gross profit is $90 ,000.
01:27
This would be my total contribution margin.
01:30
It's the same as what the gross profit is here...