Question

During the year ended December 31, 2017, State Street Corporation had the following results: Sales revenue $267,000: cost of goods sold $107,000: net income $92,400: operating expenses $55,400: net cash provided by operating activities $108,950. How much is the company’s profit margin? 40.0% 20.5% 60.0% 34.6%

Answer 1

Answer:

34.6%

Explanation:

The formula to compute the company's profit margin is shown below:

Profit margin = (Net income) ÷ (sales revenue) × 100

                     = ($92,400) ÷ ($267,000) × 100

                     = 34.60%

It shows a relationship between the net sales or sales revenue and the net income which is earned by the company. All other items which are mentioned in the question are irrelevant. So, these are not considered in the computation part. Hence, ignored it