Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is:
A)0.32
B)0.56
C)0.86
D)0.14

Question

Quizplus · Accepted Answer

Net profit margin is calculated by dividing net profit by net sales revenue.

Net Profit = Net Sales Revenue - Cost of Goods Sold - Other Expenses 
Net Profit = $780,000 - $343,200 - $327,600 = $109,200

Net Profit Margin = Net Profit ÷ Net Sales Revenue 
Net Profit Margin = $109,200 ÷ $780,000 ≈ 0.14

Therefore, the net profit margin is 0.14 or 14%. The best choice is D.

Company X Has Net Sales Revenue of $780,000,cost of Goods