The 2016 income statement of Nasir Inc.shows operating revenues of $135,800, selling expenses of $40,310, general and administrative expenses of $33,990, interest expense of $880, and income tax expense of $13,090.Nasir's stockholders' equity was $250,000 at the beginning of the year and $345,000 at the end of the year.The company has 10,000 shares of stock outstanding at December 31, 2016.

Required: Compute Nasir's profit margin.What other information would you need in order to comment on whether this ratio is favorable?

Question

The 2016 income statement of Nasir Inc.shows operating revenues of $135,800, selling expenses of $40,310, general and administrative expenses of $33,990, interest expense of $880, and income tax expense of $13,090.Nasir's stockholders' equity was $250,000 at the beginning of the year and $345,000 at the end of the year.The company has 10,000 shares of stock outstanding at December 31, 2016.
​
Required: Compute Nasir's profit margin.What other information would you need in order to comment on whether this ratio is favorable?

Quizplus · Accepted Answer

The Answer of The 2016 income statement of Nasir Inc.shows operating revenues of $135,800, selling expenses of $40,310, general and administrative expenses of $33,990, interest expense of $880, and income tax expense of $13,090.Nasir's stockholders' equity was $250,000 at the beginning of the year and $345,000 at the end of the year.The company has 10,000 shares of stock outstanding at December 31, 2016.
​
Required: Compute Nasir's profit margin.What other information would you need in order to comment on whether this ratio is favorable?

The 2016 Income Statement of Nasir Inc