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Sticky Note
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۔
  1. 12%
  2. 6%
  3. 40%
  4. 200%
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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