Question

A company has net income of $130,500. Its net sales were $1,740,000 and its total assets were $2,750,000. Its profit margin equals 7.5%.

Answer 1

True

Step-by-step explanation:

The profit margin calculation is shown below:

= (Net income ÷ net sales) × 100

= ($130,500 ÷ $1,740,000) × 100

= 7.5%

We simply divide net income by net sales in order to achieve the gross profit margin. This indicates a correlation between net income or net income and net sales.

All other information provided is irrelevant. Therefore, it was ignored