Question

Excerpts from Dowling Company's December 31, 2021 and 2020, financial statements and key ratios are presented below (all numbers are in millions): 2021 2020 Accounts receivable (net) $ 20 $ 16 Net sales $ 115 $ 100 Cost of goods sold $ 60 $ 55 Net income $ 20 $ 17 Inventory turnover 5.22 Return on assets 10.3 % Equity multiplier 2.36 Dowling's 2021 profit margin is (rounded):

Answer 1

17.4%

Step-by-step explanation:

Calculation for Dowling's 2021 profit margin

Using this formula

Profit Margin = Net Income/ Net Sales

Let plug in the formula

Profit Margin=$20/$115

Profit Margin= 0.1739 ×100

Profit Margin= 17.4%

Therefore Dowling's 2021 profit margin will be 17.4%