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.)

Question

Business

Melissa Blake

25 February, 14:58

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)

Know the Answer?

Jeffery Rosales · Answer 1

= 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%

Lillie Schwartz · Answer 2

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%