Hi! Would someone please check to ensure that I have done this correct. I need to find the profit margin for company A.

Company A's partial income statement:
Operating revenues: $700,000
Interest revenue: $50,000
Selling expense:$360,800
General expenses:$275,000

Net income/Operating revenues = profit margin
$750,000 / $635,800 =117.96%... (for some reason to me this looks too high)

Criado

It looks high because your Net Income does not have the right figure.

Hints:
1. Profit Margin = Net Income / Total Revenue
2. NET Income
3. Net Income is not the same as Total Revenue

stuckinmath

Ok Thanks!

Does this look correct?

750,000-635,800=114,200

114,200/700,000=16.31% profit margin

Criado

It is almost perfect except that you should use the Total Revenue as denominator.