Determining Profit margin?
If I have the following information:
Income Tax Expense 139200
Selling Expenses 383100
Interest Expense 5800
Gener & Administrative Expenses 369990
Earnings Per Share 2.97
Stockholders Equity 549,000
How do I go about determining the profit margin??
Please explain... I don't just want the answer, I want to know how you got to it! Thanks!
Thats all the info given. It's also supposed to be expressed as a %...
Here are the possible choices:
- Anonymous1 decade agoFavorite Answer
Expenses are what you pay to remain in business. Revenue is the rewards you reap for being in business. Add your expenses. Subtract the total expenses from your revenue (sales). That's your profit margin. If it is negative and remains that way, you won't be in business much longer (unless you're a sub-prime mortgage lender with government bail-outs).
- burgerLv 41 decade ago
If you are selling a product, you need to know the cost of goods sold. Unless this is included in Gen Expense, it is not listed.
If you are not selling a product, then what did the business sell? How much did it cost?
You can then proceed from there. As it is, I don't see where you have enough information.
Based on your additional details, if you add up all the expenses and subtract from the sales you have 449,910.
Divide that by the sales and you get 33.4% so apparently that's what you're looking for. But it's still missing COGS unless it is strictly a service business which it doesn't appear to be.