Question

Category	Prior year	Current year
Accounts payable	41,400	45,000
Accounts receivable	115,200	122,400
Accruals	16,200	13,500
Additional paid in capital	200,000	216,660
Cash	???	???
Common Stock @ par value	37,600	42,000
COGS	131,400	174,020.00
Depreciation expense	21,600	22,237.00
Interest expense	16,200	16,207.00
Inventories	111,600	115,200
Long-term debt	135,000	138,111.00
Net fixed assets	377,019.00	399,600
Notes payable	59,400	64,800
Operating expenses (excl. depr.)	50,400	66,669.00
Retained earnings	122,400	136,800
Sales	255,600	335,862.00
Taxes	9,900	19,078.00

What is the firm's current year operating profit margin?

Submit

Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

Answer 1

Figures from Current year: Sales = 335,862.00 | COGS = 174,020.00 | Operating expenses (excl. depr.) = 66,669.00

Depreciation Expense = 22,237.00

Gross Profit = Sales - COGS

Gross Profit = 335,862.00 - 174,020.00 = 161,842

Operating Profit = Gross Profit - Operating expenses (excl. depr.) - Depreciation Expense

Operating Profit = 161,842 - 66,669.00 - 22,237.00

Operating Profit = 72,936.00

Operating Profit Margin = Operating Profit / Sales

Operating Profit Margin = 72,936.00 / 335,862.00 = 0.21716 or 21.72%

Hence, Firm's Operating profit margin in current year is 21.72%.