(a)
Profit Margin: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue.
Operating Profit: Operating profit or income is the excess of sales revenue over the operating expenses of a company. It is used to measure the profitability of company’s operations.
Comprehensive Income: It’s a measure of company’s total income that includes unrealized gain that has not been received like gain on available for sale securities.
To compute: The profit margin of Company L for 2013 and compare it with that of 2011.
(b)
To identify: The operating profit recorded for 2013 by Company L.
(c)
To identify: The comprehensive gains and losses recorded in 2013 by Company L.

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Chapter 18 Solutions
ACCOUNTING PRINCIPLES
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