The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year,respectively.Net income and sales for the year are $100,000 and $800,000,respectively.What is Hidden Valley's profit margin?

Question

Quizplus · Accepted Answer

Profit margin is calculated by dividing net income by total sales.
Profit Margin = Net Income / Total Sales
Profit Margin = $100,000 / $800,000
Profit Margin = 0.125 or 12.5%
Therefore, the answer is B) 12.5%.

The Balance Sheet of Hidden Valley Farms Reports Total Assets