To calculate the net profit margin, we first need to determine the net profit. The formula for net profit can be stated as follows:
\[ \text{Net Profit} = \text{Sales} - \text{Total Expenses} \]
Total expenses include Cost of Goods Sold (COGS), operating expenses (excluding depreciation), depreciation expense, interest expense, and taxes.
1. Calculate Total Expenses
We start by calculating the total expenses:
\[ \text{Total Expenses} = \text{COGS} + \text{Operating Expenses} + \text{Depreciation Expense} + \text{Interest Expense} + \text{Taxes} \]
Substituting the values provided:
- COGS = \(179,106.00\)
- Operating Expenses = \(62,080.00\)
- Depreciation Expense = \(22,119.00\)
- Interest Expense = \(16,749.00\)
- Taxes = \(18,725.00\)
\[ \text{Total Expenses} = 179,106 + 62,080 + 22,119 + 16,749 + 18,725 \]
Calculating this step-by-step:
- \(179,106 + 62,080 = 241,186\)
- \(241,186 + 22,119 = 263,305\)
- \(263,305 + 16,749 = 280,054\)
- \(280,054 + 18,725 = 298,779\)
So, the Total Expenses is:
\[ \text{Total Expenses} = 298,779.00 \]
2. Calculate Net Profit
Now, we can determine the net profit:
\[ \text{Net Profit} = \text{Sales} - \text{Total Expenses} \]
Substituting the values:
- Sales = \(338,431.00\)
\[ \text{Net Profit} = 338,431 - 298,779 = 39,652 \]
3. Calculate Net Profit Margin
The net profit margin is calculated using the following formula:
\[ \text{Net Profit Margin} = \left(\frac{\text{Net Profit}}{\text{Sales}}\right) \times 100 \]
Substituting the values:
\[ \text{Net Profit Margin} = \left(\frac{39,652}{338,431}\right) \times 100 \]
Calculating this quotient:
\[ \frac{39,652}{338,431} \approx 0.117 \]
Now, converting it into a percentage:
\[ \text{Net Profit Margin} \approx 0.117 \times 100 \approx 11.7% \]
Conclusion:
The firm's current year net profit margin is approximately 11.7%.
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