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22 March, 21:17

A company has the following financial information: Sales $200,000 Net income 100,000 Depreciation 20,000 Interest 10,000 Taxes 5,000 What is the company's operating profit margin?

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  1. 22 March, 21:26
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    profit margin is 57.5 %

    Explanation:

    given data

    Sales = $200000

    Net income = 100000

    Depreciation = 20000

    Interest = 10000

    Taxes = 5000

    to find out

    profit margin

    solution

    we know here profit margin is express as

    profit margin = operating profit / sales ... 1

    so here operating profit = Net income + Interest + Taxes

    operating profit = 100000 + 10000 + 5000

    operating profit = 115000

    put here value in equation 1

    profit margin = 115000 / 200000

    profit margin = 0.575

    so profit margin is 57.5 %
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