Clydesdale Company has sales of $4,500,000, invested assets of $2,000,000, and operating expenses of $3,600,000. The company has established a minimum return on investment of 7%.
-Clydesdale Company's profit margin is

Question

Quizplus · Accepted Answer

The profit margin is calculated as (Net Income / Sales) * 100. Net Income is Sales - Operating Expenses, which is $4,500,000 - $3,600,000 = $900,000. Therefore, the profit margin is ($900,000 / $4,500,000) * 100 = 20%.

Clydesdale Company Has Sales of $4,500,000, Invested Assets of $2,000,000