Evergreen Corporation has two major divisions: Agricultural Products and Industrial Products. It provides the following information for the year. $$\begin{array} { | l | r | r | }
\hline & \text { Agriculture Division } & \text { Industrial Division } \
\hline \text { Net sales } & \$ 140,000 & \$ 1,250,000 \
\hline \text { Operating income } & \$ 17,600 & \$ 218,000 \
\hline \text { Average assets } & \$ 340,000 & \$ 5,500,000 \
\hline
\end{array}$$ Calculate the profit margin ratio for the Industrial Division of the company. (Round your answer to two decimal places.)
A) 3.96%
B) 5.18%
C) 17.44%
D) 12.57%

Question

Evergreen Corporation has two major divisions: Agricultural Products and Industrial Products. It provides the following information for the year. $$\begin{array} { | l | r | r | } 
\hline & \text { Agriculture Division } & \text { Industrial Division } \
\hline \text { Net sales } & \$ 140,000 & \$ 1,250,000 \
\hline \text { Operating income } & \$ 17,600 & \$ 218,000 \
\hline \text { Average assets } & \$ 340,000 & \$ 5,500,000 \
\hline
\end{array}$$ Calculate the profit margin ratio for the Industrial Division of the company. (Round your answer to two decimal places.)
A) 3.96%
B) 5.18%
C) 17.44%
D) 12.57%

Quizplus · Accepted Answer

The profit margin ratio is calculated by dividing operating income by net sales. For the Industrial Division, the profit margin ratio is $218,000/$1,250,000 = 17.44%.

Evergreen Corporation Has Two Major Divisions: Agricultural Products and Industrial