Find the net profit margin if earnings before interest and taxes is $20,000, net income is $10,000, sales are $50,000, and total assets are $100,000.

Question

Quizplus · Accepted Answer

Net profit margin is calculated by dividing net income by sales. 
Net profit margin = (Net income / Sales) x 100% 
= (10,000 / 50,000) x 100%
= 0.2 x 100% 
= 20% 
Therefore, the net profit margin is 20%. Option B is the correct choice.

Find the Net Profit Margin If Earnings Before Interest and Taxes