Question

Question 13 (0.2 points) During the latest year, XYZ Corporation has total sales of $300,000, net income of 20,000, and its year-end total as sets were $500,000. The firm's total debt to total assets ratio was 50% What is firm's profit margin as a percentage? Enter your answers as a percentage rounded to 2 decimal places. For example, enter 8.43 (% ) instead of 0.0 843. Your Answer: Answer

Answer 1

Solution:

The formula for calculating the profit margin is = Net Income / Total Sales

As per the information given in the question we have

Net Income = $ 20,000   ; Total Sales = $ 300,000

Applying the available information in the formula we have

= $ 20,000 / $ 300,000

= 0.066667

= 6.6667 %

= 6.67 % ( when rounded off to two decimal places )

Thus the profit margin percentage of XYZ is = 6.67 %