Tom's business expenses are $45,000 per month. If his monthly revenue is $60,000, what is his monthly profit margin in percentage?

Answer 1

To calculate Tom's monthly profit margin in percentage, we first need to determine his monthly profit, which is found by subtracting his monthly expenses from his monthly revenue.

1. Calculate Monthly Profit: \[ \text{Monthly Profit} = \text{Monthly Revenue} - \text{Monthly Expenses} \] \[ \text{Monthly Profit} = 60,000 - 45,000 = 15,000 \]

2. Calculate Profit Margin Percentage: The profit margin percentage is calculated using the formula: \[ \text{Profit Margin} , (%) = \left( \frac{\text{Monthly Profit}}{\text{Monthly Revenue}} \right) \times 100 \] \[ \text{Profit Margin} , (%) = \left( \frac{15,000}{60,000} \right) \times 100 \] \[ \text{Profit Margin} , (%) = 0.25 \times 100 = 25% \]

Thus, Tom's monthly profit margin is 25%.