Question

If a stadium pays 15,000 for labor and 12,000 for parking, what is the stadiums profit margin if the game generates $145,952 in revenue?

Answer 1

Given:

Revenue =$145,952

Since no discounts or returns are indicated in the problem we will assume that revenue is equal to net sales.

Expenses, = 15,000+12,000=27,000

The profit margin ratio formula can be calculated by dividing net income by net sales.

Net income equals total revenues minus total expenses.

Net Income=145,952-27,000= 118,952

So Profit Margin is:

118,952/145952

.815 or 81.5%