K Grocers' 2016 financial statements show interest expense of $870 million, net income of $1,505 million, sales of $225,935 million, and average total assets of $23,491 million. Assume that the statutory tax rate is 35%.
How much is K Grocers' profit margin for the year?
A) 0.92%
B) 1.05%
C) 8.81%
D) There is not enough information to calculate the ratio

Question

Quizplus · Accepted Answer

Profit margin = EWI / Sales
= $1,505 million + [$870 million x (1 - 0.35)] / $225,935 million = 0.92%.

K Grocers' 2016 Financial Statements Show Interest Expense of $870