Davis Corporation reported net income $48,000, net sales $400,000, and average assets $800,000 for 2014. The 2014 profit margin was
A) 6%.
B) 12%.
C) 50%.
D) 200%.

Question

Quizplus · Accepted Answer

The profit margin formula is net income divided by net sales, expressed as a percentage. Therefore, the profit margin for Davis Corporation is:
$48,000 / $400,000 = 0.12 or 12%.

Davis Corporation Reported Net Income $48,000, Net Sales $400,000, and Average