Multiple Choice
Clarence saved 19\% of the money he earned. If he earned \$90, how much did Clarence save?
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4. Merchandising Operations
Net Sales
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A company reports net sales of \$500,000 and net income of \$50,000 for the current year. What is the firm's current year net profit margin?
A
10\%
B
50\%
C
5\%
D
1\%
Verified step by step guidance1
Understand the concept of net profit margin: Net profit margin is a financial metric that shows the percentage of net income relative to net sales. It is calculated using the formula: Net Profit Margin = (Net Income / Net Sales) × 100.
Identify the given values from the problem: Net sales = \$500,000 and Net income = \$50,000.
Substitute the given values into the formula: Net Profit Margin = (50,000 / 500,000) × 100.
Simplify the fraction (50,000 / 500,000) to determine the proportion of net income to net sales.
Multiply the result by 100 to express the net profit margin as a percentage.
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