Question

The Card Shoppe had a gross margin last year of $2,000,000 and a net profit of $300,000, while net sales were $2,500,000. What was The Card Shoppe's net profit margin for last year?

1) 12.0 percent
2) 15.0 percent
3) 20.0 percent
4) 68.0 percent
5) 80.0 percent

Answer 1

The net profit margin of The Card Shoppe is calculated by dividing the net profit ($300,000) by the net sales ($2,500,000) and then multiplying by 100. The result is a net profit margin of 12.0 percent, which corresponds to option 1.

Step-by-step explanation:

The net profit margin for The Card Shoppe last year can be calculated by dividing the net profit by the net sales and then multiplying the result by 100 to get a percentage. Using the information provided:

Net Profit Margin = (Net Profit / Net Sales) x 100

Net Profit Margin = ($300,000 / $2,500,000) x 100

Net Profit Margin = 0.12 x 100

Net Profit Margin = 12.0 percent

Therefore, the correct answer is option 1) 12.0 percent.