The 2015 income statement of Cigmar Enterprises shows operating revenues of $120,500, selling expenses of
$35,200, general and administrative expenses of $29,900, interest expense of $1,500, and income tax expense of
$10,520. Cigmar's stockholders' equity was $280,000 at the beginning of the year and $320,000 at the end of the
year. The company has 20,000 shares of stock outstanding at December 31, 2015.
REQUIRED:
Compute Cigmar's profit margin. What other information would you need in order to comment on
whether this ratio is favorable?

Question

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The Answer of The 2015 income statement of Cigmar Enterprises shows operating revenues of $120,500, selling expenses of
$35,200, general and administrative expenses of $29,900, interest expense of $1,500, and income tax expense of
$10,520. Cigmar's stockholders' equity was $280,000 at the beginning of the year and $320,000 at the end of the
year. The company has 20,000 shares of stock outstanding at December 31, 2015.
REQUIRED:
Compute Cigmar's profit margin. What other information would you need in order to comment on
whether this ratio is favorable?

The 2015 Income Statement of Cigmar Enterprises Shows Operating Revenues