Accounts payable=45,000

Question

Accounts receivable=122,400
Accruals=13,500
Additional paid in capital=216,660
Common Stock @ par value=42,000
COGS=178,385.00
Depreciation expense=22,370.00
Interest expense=16,944.00
Inventories=115,200
Long-term debt=139,645.00
Net fixed assets=399,600
Notes payable=64,800
Operating expenses (excl. depr.)=61,655.00
Retained earnings=136,800
Sales=335,454.00
Taxes=18,953.00
What is the firm's net profit margin?

Answer 1

To calculate the firm's net profit margin, we first need to determine the net income. The net profit margin is defined as net income divided by total sales.

1. Calculate Total Revenue (Sales): \[ \text{Sales} = 335,454.00 \]

2. Calculate Total Expenses:

   • Cost of Goods Sold (COGS): \(178,385.00\)
   • Operating expenses (excluding depreciation): \(61,655.00\)
   • Depreciation expense: \(22,370.00\)
   • Interest expense: \(16,944.00\)
   • Taxes: \(18,953.00\)

   Let's sum these expenses: \[ \text{Total Expenses} = \text{COGS} + \text{Operating Expenses} + \text{Depreciation} + \text{Interest} + \text{Taxes} \] \[ \text{Total Expenses} = 178,385.00 + 61,655.00 + 22,370.00 + 16,944.00 + 18,953.00 \] \[ \text{Total Expenses} = 298,307.00 \]

3. Calculate Net Income: \[ \text{Net Income} = \text{Sales} - \text{Total Expenses} \] \[ \text{Net Income} = 335,454.00 - 298,307.00 \] \[ \text{Net Income} = 37,147.00 \]

4. Calculate Net Profit Margin: \[ \text{Net Profit Margin} = \frac{\text{Net Income}}{\text{Sales}} \times 100 \] \[ \text{Net Profit Margin} = \frac{37,147.00}{335,454.00} \times 100 \] \[ \text{Net Profit Margin} \approx 11.09% \]

So, the firm's net profit margin is approximately 11.09%.