If a company has net sales of $134,000, gross profit of $48,000, and $14,000 net income. The net income percentage would be approximately 36%.

Question

Quizplus · Accepted Answer

The net income percentage is calculated by dividing the net income by net sales and multiplying by 100.

Net income percentage = (Net income / Net sales) x 100

In this case,
Net income percentage = (14,000 / 134,000) x 100
Net income percentage = 10.44%

Therefore, the statement is false. The net income percentage is approximately 10.44%, not 36%.

If a Company Has Net Sales of $134,000, Gross Profit