Question

In: Accounting

Archware Systems has total assets of $35.594 billion, total debt of $9.678 billion, and net sales...

Archware Systems has total assets of $35.594
billion, total debt of $9.678 billion, and net sales of $22.230 billion. Their
net profit margin for the year was 0.23, while the operating profit
margin was 30 percent. What is Archware’s net income? (Answer needs to be stated in billions. For example: 2.83) Round to two decimal places.

Solutions

Expert Solution

Net profit margin = Net Income/ Sales

Rearrange the equation to get:

Net Income = Net profit margin * Sales

Net Income = (PM) * (NS) = 0.23 * $22.230 billion = $5.11 billion

Archware's net income is $5.11 billion


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