Presented below is the current year-ended income statement for Hildegard, Inc.:
(In thousands)
Sales $200,000
Cost of goods sold 60,800
Depreciation expense 20,500
Other operating expenses 33,600
Income taxes expense 16,530
Net income $68,570
Suppose Hildegard, Inc. forecasts the following events will occur during the following year:
1. Increase in sales, cost of goods sold, and cash by 20%
2. Effective tax rate, 30%
3. Increase in operating expenses by 10%
4. No change in depreciation
How much is Hildegard, Inc.'s pro forma gross profit margin ratio expected to be during the year?
Select one:
a. 58.5%
b. 68.5%
с. 40.0%
d. 69.6%