Question

Papa's Pizza has the following items for the past year: Net sales are $24,128, net income is $2,223, total assets at the beginning of year are $14,898, and total assets at the end of year are $15,465. What is the profit margin? 9.2%

61.7%
14.6%
14.9%

Answer 1

To calculate the profit margin, we divide the net income by net sales and express the result as a percentage:

Profit margin = (Net income / Net sales) x 100%

In this case, we have:

Net sales = $24,128

Net income = $2,223

Therefore:

Profit margin = ($2,223 / $24,128) x 100% = 9.2%

So the profit margin for Papa's Pizza for the past year is 9.2%.