Question

Last month, Korey’s Comics had $4,350 in net sales with a gross profit of $3,320 and a net income of $1,850. Calculate Korey’s net profit margin.

Answer 1

0.43 or 43%

Explanation:

In this question, we are asked to calculate the net profit margin of Korey’s cosmetics. The net profit margin is simply a measure of how much net income a company makes with total sales achieved. It can also be referred to as net margin.

Mathematically, it can be calculated or expressed as follows:

Net profit margin = net income/total sales revenue

According to the values in the question, the net income is $1,850 while the total sales revenue is $4,350.

The net profit margin is thus : 1850/4350 = 0.43