Profit margin is calculated by dividing:Question 2Answera.profit by equityb.sales by cost of sales.c.profit by total assetsd.profit by net sales.

Using the financial statements below, calculate the profit margin as a percentage for the current year. Please calculate to 1 decimal place. Do not use the % symbol. For example, if it is 3.2%, enter 3.2 into the box. If your answer is a negative, please include the minus symbol before the number (no space in between)Profit and loss statement Current year Prior yearRevenue 14,800 18,500Less Cost of sales 6,000 7,500Gross profit 8,800 11,000Less expenses Wages Expense 5,500 6,500Interest Expense 2,200 2,000Depreciation Expense 1,000 1,200Advertising Expense 900 800Net profit (800) 500BALANCE SHEET Current year Prior yearCurrent assets Cash 14,250 16,700Accounts Receivable 14,000 3,500Inventory 6,000 2,500Prepaid Expenses 650 1,500Non-current assetsProperty Plant Equipment 192,500 193,500Land 210,000 210,000Total assets 437,400 427,700Current liabilitiesAccounts Payable 11,700 4,200Unearned Revenue 3,500 2,000Wages Payable 3,500 2,500Non-current liabilitiesBank Loan 118,000 122,500Total liabilities 136,700 131,200NET ASSETS 300,700 296,500Equity Share Capital 255,000 250,000Retained Earnings 45,700 46,500TOTAL EQUITY 300,700 296,500

A company has total sales of Rs. 2,000,000, cost of goods sold of Rs. 1,200,000, operating expenses of Rs. 500,000 and interest expenses of Rs. 100,000. What is the company’s operating profit margin?20%15%10%25%

Which of the following statements about the profit margin is NOT true?Question 1Answera.The profit margin indicates the percentage of sales revenue that ends up as profitb.The profit margin measures a business’s operating success for a given period of timec.If the sales price decreases and expenses stay consistent, the profit margin will decrease.d.The profit margin indicates the amount of profit generated by each dollar invested in assets.

If sales revenue is $600,000 and cost of sales is $450,000, the gross profit margin is:33%25%67%75%

The contribution margin is calculated by subtracting:a.Variable costs from fixed costsb.Fixed costs from total costsc.Variable costs from sales revenued.Sales revenue from variable costs