Final answer:
The profit margin measures the profitability of a company by comparing its net income to its net sales. Kindle Fire Prevention Corp having a profit margin means they are able to generate profit from their sales. A higher profit margin is generally preferable as it indicates that a company is more efficient in generating profit from its operations.
Step-by-step explanation:
The profit margin is a financial metric that measures the profitability of a company by comparing its net income to its net sales. For a company like Kindle Fire Prevention Corp, having a profit margin means that they are able to generate profit from their sales.
To calculate the profit margin, you divide the net income by the net sales and multiply the result by 100 to get a percentage. For example, if Kindle Fire Prevention Corp has a net income of $1 million and net sales of $5 million, the profit margin would be 20% ($1 million/$5 million * 100).
This indicates that for every dollar of sales, Kindle Fire Prevention Corp is able to generate 20 cents in profit. A higher profit margin is generally preferable as it indicates that a company is more efficient in generating profit from its operations.