Question

In: Accounting

What does net profit margin indicate? A. The marginal growth or decline of net income year...

What does net profit margin indicate?

  • A. The marginal growth or decline of net income year over year.

  • B. How much of a return is generated from an investment.

  • C. How much net profit is generated per each dollar of revenue.

  • D. How much net profit is generated for every dollar of assets.

Solutions

Expert Solution

Answer) option c

How much net profit is generated per each dollar of revenue.

Profit margin =net income/sales

Thus The net profit margin is equal to how much net income or profit is generated as a percentage of revenue


Related Solutions

What is the firm's current year net profit margin?
Category Prior Year Current YearAccounts payable ??? ???Accounts receivable 320,715 397,400Accruals 40,500 33,750Additional paid in capital 500,000 541,650Cash 17,500 47,500Common Stock 94,000 105,000COGS 328,500 428,048.00Current portion long-term debt 33,750 35,000Depreciation expense 54,000 54,731.00Interest expense 40,500 41,017.00Inventories 279,000 288,000Long-term debt 339,670.00 401,877.00Net fixed assets 946,535 999,000Notes payable 148,500 162,000Operating expenses (excl. depr.) 126,000 161,905.00Retained earnings 306,000 342,000Sales 639,000 850,323.00Taxes 24,750 48,686.00What is the firm's current year net profit margin?
Carl's Automotive operating income for the year was $900,000. Their net profit margin was 2.25% and...
Carl's Automotive operating income for the year was $900,000. Their net profit margin was 2.25% and their operating profit margin was 4.25%. Their total taxes amount to 40%. Depreciation was 10% of net fixed assets which totaled $1,250,000. Create their Income statement. Be sure to include all items of an income statement (operating costs, DA, Int, Taxes, etc.).
What does a net profit margin of 15% and an industry average of-1.2% mean?
What does a net profit margin of 15% and an industry average of -1.2% mean?
firm net profit margin was 6% with its $300,000 net sales last year. Its interest income...
firm net profit margin was 6% with its $300,000 net sales last year. Its interest income was $20,000 and interest expense was $40,000. If its average tax rate was 40%, what was the firm’s operating income last year? A. $40,000 B. $20,000 C. $60,000 D. $50,000 E. $30,000
1. Speedy Ltd has a profit margin of 17.1 percent and net income of $33,700. What...
1. Speedy Ltd has a profit margin of 17.1 percent and net income of $33,700. What is the common-size percentage for the cost of goods sold if that expense amounted to $122,600 for the year? A. 62.21 percent B. 13.51 percent C. 15.37 percent D. 98.12 percent E. 28.45 percent 2. Koru LLP has total assets of $819,200, long-term debt of $164,500, total equity of $366,900, net fixed assets of $582,800, and sales of $1,121,500. The profit margin is 3.2...
Analyze the following ratios. What does the NET PROFIT MARGIN RATIO tell about this company? Are...
Analyze the following ratios. What does the NET PROFIT MARGIN RATIO tell about this company? Are the trends getting better or worse? Why or why not? Would you recommend purchase of this stock? Why or why not? Please explain your answers. Net Profit 2016 2017 2018 Margin Ratio 10.91 8.97 8.71 What does the RETURN ON TOTAL ASSETS RATIO tell about this company? Are the trends getting better or worse? Why or why not? Would you recommend purchase of this...
A company has net income of $190,000, a profit margin of 9.20 percent, and an accounts...
A company has net income of $190,000, a profit margin of 9.20 percent, and an accounts receivable balance of $106,056. Assuming 66 percent of sales are on credit, what is the company's days' sales in receivables?
A company has net income of $188,000, a profit margin of 9.20 percent, and an accounts...
A company has net income of $188,000, a profit margin of 9.20 percent, and an accounts receivable balance of $106,149. Assuming 66 percent of sales are on credit, what is the company's days' sales in receivables?
A company has net income of $200,000, a profit margin of 7%, and an accounts receivable...
A company has net income of $200,000, a profit margin of 7%, and an accounts receivable balance of $120,000. Assuming 100% of sales are on credit, what is the company's days' sales in receivables?
For 20Y2, McDade Company reported a decline in net income. At the end of the year,...
For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement: McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Sales $7,369,600.00 $6,580,000.00 3 Cost of goods sold 2,719,733.00 2,193,333.00 4 Gross profit $4,649,867.00 $4,386,667.00 5 Selling expenses $1,049,600.00 $820,000.00 6 Administrative expenses 658,050.00 535,000.00 7 Total operating expenses $1,707,650.00 $1,355,000.00 8 Income...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT