Profitability ratios: Tigger Company has reported the financial results for year-end 2006. Based on the information given, calculate the company's gross profit margin and operating profit margin. Net sales = $4,156,700
Profit = $778,321
Cost of sales = $2,715,334
EBIT = $1,356,098

Question

Quizplus · Accepted Answer

Gross profit margin = Gross profit / Net sales = (Net sales - Cost of sales) / Net sales = ($4,156,700 - $2,715,334) / $4,156,700 = 34.7%Operating profit margin = Operating profit / Net sales = EBIT / Net sales = $1,356,098 / $4,156,700 = 32.6%

Profitability Ratios: Tigger Company Has Reported the Financial Results for Year-End