The following amounts were taken from the financial statements of Palmer Company: The profit margin for 2014 is

Question

The following amounts were taken from the financial statements of Palmer Company:  The profit margin for 2014 is

Quizplus · Accepted Answer

The profit margin is calculated by dividing the net income by the total revenue, and then multiplying by 100 to get a percentage.

So, for 2014: 
Net income = $40,000 
Total revenue = $200,000

Profit margin = (40,000 / 200,000) x 100 = 20%

Therefore, the best choice is C, with an explanation that the profit margin for 2014 is 20%.

The Following Amounts Were Taken from the Financial Statements of Palmer