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6 January, 12:08

Evergreen Corporation has two major divisions: Agricultural Products and Industrial Products. It provides the following information for the year. Agriculture Division Industrial Division Net sales $ 150 comma 000 $ 1 comma 750 comma 000 Operating income $ 16 comma 000 $ 218 comma 000 Average assets $ 340 comma 000 $ 56 comma 600 comma 000 Calculate the profit margin ratio for the Industrial Division of the company. (Round your answer to two decimal places.)

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Answers (2)
  1. 6 January, 12:20
    0
    The question is missing below options:

    A. 5.45%

    B. 13.43%

    C. 12.00%

    D. 4.27%

    E. 12.46%

    The correct option is E, 12.46%

    Explanation:

    Profit margin ratio shows the percentage of return on net sales. The formula is given by:

    Profit margin ratio=operating income/net sales*100%

    For the industrial division, the following details are available:

    operating income is $218,000

    net sales is $1,750,000

    profit margin ratio=$218,000/$1,750,000*100%

    profit margin ratio is 12.46%
  2. 6 January, 15:26
    0
    = 12.5%

    Explanation:

    Profit margin ration is the the percentage of sales that a business earns as profit. In the context of a division, the higher the figure, the better and the more profitable the operation of the division. The profit margin ratio is computed as follows:

    Profit margin ratio = Net operating profit / Sales * 100

    Industrial profit margin ratio

    Net operating margin - 218,000

    Net Sales - 1,750,000

    Profit margin ratio

    = 218,000/1,750,000 * 100

    = 12.5%
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