The following financial statement information is available for Jones Corporation: $$\begin{array} { l r r }
& { 2013 } &{ 2012 } \
\text { Net sales } & \$ 784,000 & \$ 697,000 \
\text { Cost of goods sold } & 406,000 & 377,000 \
\text { Net income } & 112,000 & 80,000 \
\text { Tax expense } & 48,000 & 29,000 \
\text { Interest expense } & 14,000 & 14,000
\end{array}$$ The profit margin ratio for 2013 is

Question

The following financial statement information is available for Jones Corporation: $$\begin{array} { l r r } 
&  { 2013 } &{ 2012 } \
\text { Net sales } & \$ 784,000 & \$ 697,000 \
\text { Cost of goods sold } & 406,000 & 377,000 \
\text { Net income } & 112,000 & 80,000 \
\text { Tax expense } & 48,000 & 29,000 \
\text { Interest expense } & 14,000 & 14,000
\end{array}$$ The profit margin ratio for 2013 is

Quizplus · Accepted Answer

The profit margin ratio is calculated as (Net Income / Net Sales) x 100. For 2013, it is ($112,000 / $784,000) x 100 = 14.3%.

The Following Financial Statement Information Is Available for Jones Corporation