https://file.aiquickdraw.com/mathbot/file/1728875680141m7h8nn52.jpg

To compute the profit margin for Stevens Co., we use the following formula:

\[
\text{Profit Margin} = \left( \frac{\text{Operating Profit Before Tax}}{\text{Sales}} \right) \times 100
\]

### Data from the table:
- Operating profit before tax: \$120,000
- Sales: \$1,250,000

Now, let's calculate the profit margin:

\[
\text{Profit Margin} = \left( \frac{120,000}{1,250,000} \right) \times 100 = 9.60\%
\]

Thus, the correct answer is **9.60%**.

Do you have any other questions or would you like more details?

---

Here are five related questions:
1. How would the profit margin change if the operating profit increased by 20%?
2. What is the significance of the profit margin in assessing a company's financial health?
3. How is the tax rate on operating profit typically factored into overall profitability?
4. Can profit margin be affected by average total assets?
5. What is the difference between profit margin and operating margin?

**Tip:** Profit margin helps you understand how efficiently a company is converting sales into actual profit.

Use the following selected balance sheet and income statement information for Stevens Co. to compute the profit margin, to the nearest hundredth of a percent.

Calculate the profit margin for Stevens Co. based on selected balance sheet and income statement information. This problem involves the profit margin formula and ratio analysis using operating profit and sales data. Suitable for high school students in Grades 10-12.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation