The following financial statement information is available for James Corporation: $\begin{array}{lrr}
&2017&2016\
\text { Net sales } & \$ 780,000 & \$ 697,000 \
\text { Cost of goods sold } & 406,000 & 377,000 \
\text { Net income } & 120,000 & 80,000 \
\text { Tax expense } & 48,000 & 29,000 \
\text { Interest expense } & 14,000 & 14,000
\end{array}$ The profit margin ratio for 2017 is
A) 15.4%.
B) 47.9%.
C) 32.1%.
D) 13.5%.

Question

Quizplus · Accepted Answer

The profit margin ratio is calculated as (Net Income / Net Sales) * 100. For 2017, this is (120,000 / 780,000) * 100 = 15.4%.

The Following Financial Statement Information Is Available for James Corporation