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Martinez Corporation reported net sales of $773,000, net income of $134,000, and total assets of $7,714,260. The profit margin is:_____

a. 577.0%
b. 5.77%
c. 82.66%
d. 1.73%
e. 17.34%

User Rhyek
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1 Answer

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Answer:e. 17.34%

Step-by-step explanation:

Profit margin shows how the activities of a firm or business activity are profitable by taking into accounts costs involved in producing and selling goods.

it can be calculate in three ways using the Gross profit margin formulae, Net Profit Margin formulae or the Operating margin formulae

Given

net sales = $773,000

net income = $134,000

Total assets of $7,714,260

We will use the Operating margin formulae which is the ratio of the Operating income to Revenue multiplied by 100

Profit margin =Operating income ( Net Income )/Revenue ( Net Sales) x 100

Profit margin = $134,000/$773,000 x 100

=0.173 x 100

=17.335 rounded to 1`7.34%

User Jpincheira
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