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    stuckinmath's Avatar
    stuckinmath Posts: 17, Reputation: 1
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    #1

    Jul 15, 2008, 08:55 AM
    Profit Margin
    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's Avatar
    Criado Posts: 142, Reputation: 15
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    #2

    Jul 15, 2008, 10:43 AM
    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's Avatar
    stuckinmath Posts: 17, Reputation: 1
    New Member
    		  
    #3

    Jul 15, 2008, 06:02 PM
    Ok Thanks!

    Does this look correct?

    750,000-635,800=114,200

    114,200/700,000=16.31% profit margin
    Criado's Avatar
    Criado Posts: 142, Reputation: 15
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    #4

    Jul 15, 2008, 07:38 PM
    It is almost perfect except that you should use the Total Revenue as denominator.
    egnellie's Avatar
    egnellie Posts: 2, Reputation: 1
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    #5

    Aug 23, 2010, 02:32 AM

    the answer is 114200/ 750000 *100% = 15.23%
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #6

    Aug 24, 2010, 08:40 PM

    egnellie, we do not just do people's work for them here.

    The thread is also 2 years old and being closed.
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