Question

Ch. 3 HW Help Save & Exit Submit Check my work Problem 3-7 Profitability Ratios (LG3-4) Maggie's Skunk Removal Corp's 2018 Income statement listed net sales of $13.9 million, gross profit of $9.20 million, EBIT of $70 million, net income available to common stockholders of $4.6 million, and common stock dividends of $26 million. The 2018 year-end balance sheet isted total assets of $53.9 million and common stockholders' equity of $22.4 million with 20 m lon shares outstanding Calculate the gross profit margin. (Round your answer to 2 decimal places.) Gross profit margin Calculate the operating profit margin (Round your answer to 2 decimal places.) Operating poolt margin Calculate the profit margin (Round your answer to 2 decimal places.) < Prev 4 of 8 Next >

Answer 1

Gross profit margin = Gross profit / Net sales
Gross profit margin = $9.20 million / $13.90 million
Gross profit margin = 0.6619 or 66.19%

Operating profit margin = EBIT / Net sales
Operating profit margin = $7.00 million / $13.90 million
Operating profit margin = 0.5036 or 50.36%

Profit margin = Net income available to common stockholders / Net sales
Profit margin = $4.60 million / $13.90 million
Profit margin = 0.3309 or 33.09%