Evergreen Corporation has two major divisions: Agricultural Products and Industrial Products.It provides the following information for the year. $$\begin{array} { | l | r | r | }
\hline & \text { Agriculture Division } & \text { Industrial Division } \
\hline \text { Net sales } & \$ 140,000 & \$ 1,000,000 \
\hline \text { Operating income } & \$ 17,200 & \$ 218,000 \
\hline \text { Average assets } & \$ 310,000 & \$ 5,500,000 \
\hline
\end{array}$$ Calculate the profit margin ratio for the Industrial Division of the company.(Round your answer to two decimal places.)
A) 3.96%
B) 5.55%
C) 21.80%
D) 12.29%

Question

Evergreen Corporation has two major divisions: Agricultural Products and Industrial Products.It provides the following information for the year. $$\begin{array} { | l | r | r | } 
\hline & \text { Agriculture Division } & \text { Industrial Division } \
\hline \text { Net sales } & \$ 140,000 & \$ 1,000,000 \
\hline \text { Operating income } & \$ 17,200 & \$ 218,000 \
\hline \text { Average assets } & \$ 310,000 & \$ 5,500,000 \
\hline
\end{array}$$ Calculate the profit margin ratio for the Industrial Division of the company.(Round your answer to two decimal places.)
A) 3.96%
B) 5.55%
C) 21.80%
D) 12.29%

Quizplus · Accepted Answer

Profit margin ratio = Operating income / Net sales= 218,000 / 1,000,000= 0.218 or 21.80%

Evergreen Corporation Has Two Major Divisions: Agricultural Products and Industrial