Hello,

I am having trouble understanding how to calculate Profit margin when you are not provided Income from Operations. I understand that Profit Margins = Income from Operations / Sales

When a company has sales of $140,000, and Cost of goods Sold is $83,000, Operating Expenses being $43,000, with Invested assets of $100,000.

My calculations would be Income from Operations = (Cost of Goods Sold + Operating Expenses)

Therefore my Profit Margin would be = (83,000+43,000) / 140,000 = 90%

The problem I have is it is not one of the answers I am presented with, so either I am completely wrong or the answers provided are wrong?

Thanks,

Income from Operation would include Sales as well.

It is basically Net Income

So it would be: 140,000 – 83,000 – 43,000 = 14,000

14,000 / 140,000 = 10%