Question

Procter & Gamble reported the following information for its fiscal year end: On net sales of $57.690 billion, the company earned net income after taxes of $6.856 billion. It had a cost of goods sold of $20.430 billion and EBIT of $10.626 billion. What are the company’s gross profit margin, operating profit margin, and net profit margin?

Answer 1

Answer:

The company’s gross profit margin, operating profit margin, and net profit margin is 64.59%, 18.42% and 11.89%

Explanation:

The ratios are shown below:

1. Gross profit margin = (Gross profit ÷ net sales) × 100

where,

Gross profit = Net sales - the cost of goods sold

                    = $57.690 billion - $20.430 billion

                    = $37.26 billion

And, the net sales is $57.690 billion

Now put these values to the above formula  

So, the ratio would equal to

=  $37.26 billion ÷ $57.690 billion

= 64.59%

2. Operating profit margin

= (EBIT ÷ net sales) × 100

=  $10.626 billion ÷ $57.690 billion

= 18.42%

3. Net profit margin

= (Net income after taxes ÷ net sales) × 100

=  $6.856 billion ÷ $57.690 billion

= 11.89%