Question

Martinez Corporation reported net sales of $765,000, net income of $141,525, and total assets of $7,634,409. The profit margin is:

A. 539.0%
B. 5.4%
C. 81.4%
D. 1.9%
E. 18.5%

Answer 1

The profit margin can be calculated by dividing the net income by the net sales and multiplying by 100. The correct profit margin for Martinez Corporation is 18.5%.

Step-by-step explanation:

The profit margin can be calculated by dividing the net income by the net sales and multiplying by 100. The formula for profit margin is:

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

Using the given information:

Profit Margin = (141,525 / 765,000) x 100 = 18.5%

Therefore, the correct answer is E. 18.5%.