Chapter 17, Problem 14DQ

To determine

Introduction

Profit margin ratio is a ratio which helps in determining the profitability of the company. It is calculated by dividing net income by revenue earned. One more way of calculating the profit margin ratio is by dividing Net profits by Sales for a particular period. The formula used to calculate profit margin ratio is as follows:

  $\mathrm{Pr}ofitM\arg inRatio=\frac{NetIncomeorNet\text{ Pr}ofits}{Net\mathrm{Re}venueorNetSales}*100$