Asked by Ashley Dominguez on Jun 04, 2024
Verified
Andrew's net income was $280,000; its total assets were $1,050,000; and its net sales were $3,500,000.Calculate the company's profit margin ratio.
Profit Margin Ratio
A measure of a company's profitability, represented by net income divided by revenue, indicating the percentage of each dollar of revenue that results in profit.
Net Income
The income a business retains following the deduction of all expenses, taxes, and costs from its overall revenue.
Total Assets
A corporation's complete asset portfolio, which includes both current assets and assets held for a longer period.
- Ascertain principal financial ratios and analyze fiscal data.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
Profit Margin Ratio = Net Income/Net Sales
$280,000/$3,500,000 = 8.0%
$280,000/$3,500,000 = 8.0%
Learning Objectives
- Ascertain principal financial ratios and analyze fiscal data.