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    JennyPets's Avatar
    JennyPets Posts: 4, Reputation: 1
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    #1

    Oct 12, 2008, 03:48 PM
    How to calculate net income given the following.
    A company has:
    Sales of 27million
    Total assets of 19 million
    Total debt of 6,400,000
    Profit margin 8%

    What is the net income?
    yh70's Avatar
    yh70 Posts: 6, Reputation: 2
    New Member
    		  
    #2

    Oct 13, 2008, 04:17 AM
    There are several of ways to calculate NI depending on the information available.

    1. Sales – Total costs
    2. Dividends + Additional retained earnings
    3. Sales * Profit margin
    4. New retained earnings – Old retained earnings


    In your case we will calculate the NI as follow:

    Sales * Profit margin
    = 27,000,000 * 0.08
    = 2,160,000

    Good luck :)
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