Question

A company has net sales of $438,500, operating expenses of $131,400, depreciation of $25,000, cost of...

A company has net sales of $438,500, operating expenses of $131,400, depreciation of $25,000, cost of goods sold of $218,000, and interest expense of $32,000. What's the operating margin? Question 2 options: A) 14.6% B) 13.8% C) 11.9% D) 12.2%

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Operating Margin:

The term operating margin refers to the determination of the profitability of a company from its operations based on sales. In other words this ratio shall provide us as how the company operation has performed and the impact of it in the profit of the company. This margin is calculated based on sales and operating expenses

Operating Expenses:

The operating expenses are such expenses which directly influence the working of the company. These are sure to be incurred in order to run the business. It is variable in nature and changes according to the operation of the business.

Net sales (A)= 438,500

Cost of Goods sold (B) = 218,000

operating expense

Operating exp = 131,400

Depreciation = 25,000

Total operating expense (C)= 156,400

Operating Income(D) = 64,100

(A-B-C)

Operating Margin = operating income / Sales

= 63,600/438,000

= 14.6%

option A is correct

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Black Crown Initiate Company reported the following. Sales $2,150,000 Cost of Goods Sold $670,000 Operating Expenses...
Black Crown Initiate Company reported the following. Sales $2,150,000 Cost of Goods Sold $670,000 Operating Expenses $472,000 Interest expense included in Operating Expenses $41,000 Income Taxes 32% of income before tax Stockholders' Equity (Average) $16,000,000 Round your answers to 2 decimal places. a) Calculate net income. Net Income = $ b) Calculate the net profit margin. Net Profit Margin = % c) Calculate the times interest earned. Times Interest Earned = d) Calculate the return on equity. Return on Equity...
Last year, Twins Company reported $750,000 in sales (25,000 units) and a net operating income of...
Last year, Twins Company reported $750,000 in sales (25,000 units) and a net operating income of $25,000. At the break-even point, the company's total contribution margin equals $500,000. Based on this information, the company's: a. contribution margin ratio is 40%. b. break-even point is 24,000 units. c. variable expense per unit is $9. d. variable expenses are 60% of sales.
ALI Company reported sales of $ 9,250 this year and operating expenses other than depreciation of...
ALI Company reported sales of $ 9,250 this year and operating expenses other than depreciation of $ 5,750 and depreciation expense of $ 700. The company does not recognize amortization costs, in addition it has outstanding bonds payable of $ 3,200 with an interest rate of 5% per annum. The tax imposed by the government on company profits is 35%. In order to be able to sustain its business and generate income and cash flow in the future, the company...
Gross profit is equal to Question 8 options: a) sales minus cost of goods sold and...
Gross profit is equal to Question 8 options: a) sales minus cost of goods sold and selling and administrative expenses. b) sales minus cost of goods sold. c) sales minus selling and administrative expenses. d) sales minus cost of goods sold and depreciation expense.
Solano Company has sales of $740,000, cost of goods sold of $490,000, other operating expenses of...
Solano Company has sales of $740,000, cost of goods sold of $490,000, other operating expenses of $46,000, average invested assets of $2,200,000, and a hurdle rate of 10 percent. Required: 1. Determine Solano’s return on investment (ROI), investment turnover, profit margin, and residual income. (Do not round your intermediate calculations. Enter your ROI and Profit Margin percentage answer to the nearest 2 decimal places, (i.e., 0.1234 should be entered as 12.34%). Round your Investment Turnover answer to 4 decimal places.)...
Income Statement Sales revenues 760,500 cost of goods sold 225,000 Operating expenses (excluding depreciation) 166,500 Depreciation...
Income Statement Sales revenues 760,500 cost of goods sold 225,000 Operating expenses (excluding depreciation) 166,500 Depreciation expenses 13,500 Loss on disposal of equipment 4,500 Interest expenses 63,000 Total operating expenses (472,500) income before taxes 288,000 income tax expense (70,500) net income 217,500 Statement of financial Positions 31/12/2019 31/12/2018 Assets Cash 82,500 49,500 accounts receivables 30,000 45,000 inventory 22,500 15,000 prepaid insurance 7,500 1,500 Land 195,000 30,000 Building 240,000 60,000 less: accumulated depreciation- Building (16,500) (7,500) Equipment 40,500 15,000 less: accumulated...
Financial information is presented here for two companies. King Company Queen Company Sales revenue $56,000 ?...
Financial information is presented here for two companies. King Company Queen Company Sales revenue $56,000 ? Sales returns and allowances ? 5,000 Net sales 50,000 80,000 Cost of goods sold 33,000 ? Gross profit ? 32,000 Operating expenses 12,000 ? Net income ? 14,000 Compute the missing amounts. King Company Queen Company Sales revenue $56,000 $ Sales returns and allowances $ 5,000 Net sales 50,000 80,000 Cost of goods sold 33,000 $ Gross profit $ 32,000 Operating expenses 12,000 $...
Exercise Find the net income for a company that has the following information: Sales = 45...
Exercise Find the net income for a company that has the following information: Sales = 45 000 000 Cost of Goods Sold = 3 375 000 Depreciation Expenses = 150 000 %3D Other Operating Expenses = 300 000 Interest expenses = 0 %3D Tax rate =0.35 The company chooses to reinvest 50 000. Calculate the payout ratio. its correct number
Raymond had sales of $739,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses...
Raymond had sales of $739,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $576,000, $105,000, and $133,000, respectively. In addition, Raymond had an interest expense of $95,000 and a tax rate of 40 percent. (Ignore any tax loss carryback or carryforward provisions.) Assume Raymond paid out $16,000 in cash dividends. If spending on net fixed assets and net working capital was zero, and if no new stock was issued during the year, what is the firm's...
1a. Given: net sales, $185,200; total operating expenses, $95,200. What percent of net sales are operating...
1a. Given: net sales, $185,200; total operating expenses, $95,200. What percent of net sales are operating expenses? Round to the nearest tenth of a percent. a 48.6% b 51.4% c 94.5% d 194.5% 1b. Given: Cash, $74,000; accounts receivable, $77,000; merchandise inventory, $165,000; prepaid expenses, $1,000; land for future expansion, $225,000; accounts payable, $54,000. Calculate the equity of the business. a $486,000 b $596,000 c $542,000 d $488,000 1c. Given: gross sales, $340,000; sales returns, $3,500; sales discounts, $2,000; beginning...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT