The current net profit of Sigma Inc. is $8 million, the market price of the stock is $65, and sales is $50 million. The net profit margin of Sigma Inc. is:
A) 10%.
B) 28%.
C) 16%.
D) 8%.
E) 22%.

Question

Quizplus · Accepted Answer

Net profit margin is calculated by dividing net profit by sales and multiplying by 100%.
Net profit margin = (Net Profit/Sales) x 100%

Given, 
Net profit = $8 million
Sales = $50 million

Net profit margin = (8/50) x 100%
Net profit margin = 0.16 x 100%
Net profit margin = 16%

Therefore, the net profit margin of Sigma Inc. is 16%.

The Current Net Profit of Sigma Inc