Rose Company reported net income of $24,000, net sales of $400,000, and average assets of $600,000. Calculate the profit margin ratio.
روز کمپنی نے $24,000 کی خالص آمدنی، $400,000 کی خالص فروخت، اور $600,000 کے اوسط اثاثوں کی اطلاع دی۔
Answer: 6%
Explanation
The formula to calculate profit margin ratio is:
Net income / Net sales
$24,000 / $400,000 = 6%
Formula is:
Net profit ÷ total revenue × 100
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