Question

Barney Corporation reported the following figures for their year ending December 31, 2019: Gross profit: 538,000 Cost of goods sold: 453,000 Net income: 230,000 Using the data above, calculate Barney Corp's 2019 Gross Profit Margin.

Answer 1

Barney Corp.'s gross profit margin for 2019 = 54.29%

Step-by-step explanation:

gross profit margin = (net sales - cost of goods sold) / net sales

• net sales - cost of goods sold = gross profit = $538,000
• net sales = gross profit + cost of goods sold = $538,000 + $453,000 = $991,000

gross profit margin = $538,000 / $991,000 = 0.5429 = 54.29%