Income Statement Analysis of Tech Innovations Ltd.

Very Hard Financial Statements Income Statement

During the preparation of its annual financial statements, Tech Innovations Ltd. is analyzing various items reported on its income statement for the fiscal year ended December 31, 2023. The company has outlined the following three key line items:

1. Revenue recognized from product sales: $2,000,000

2. Cost of Goods Sold (COGS): $1,200,000

3. Operating Expenses related to selling and administrative functions: $600,000

Considering these figures, which of the following statements regarding Tech Innovations Ltd.'s income statement is true?

The net income for Tech Innovations Ltd. is $200,000, reflecting only operating income before taxes.

The gross profit margin for Tech Innovations Ltd. is 25%, indicating a standard operational efficiency.

Total expenses for Tech Innovations Ltd. exceed total revenues, leading to an operational loss.

Hint

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