Question

December 31, 2021 and 2020, financial statements and key ratios are presented below (all numbers are in millions): 2021 2020 Accounts receivable (net) $ 20 $ 16 Net sales $ 115 $ 100 Cost of goods sold $ 60 $ 55 Net income $ 20 $ 17 Inventory turnover 5.22 Return on assets 10.3 % Equity multiplier 2.36 Dowling's 2021 profit margin is (rounded):

Answer 1

17.40%

Step-by-step explanation:

Profit margin = Net income / Net sales * 100

Profit margin = $20 million / $115 million * 100

Profit margin = 0.1739130 * 100

Profit margin = 17.3913%

Profit margin = 17.40%

So, Dowling's 2021 profit margin is 17.40%