The Following Information Pertains to Cheng Company What Is the Profit Margin for Cheng?
A) 50

question 3

Multiple Choice

The following information pertains to Cheng Company. Assume that all statement of financial position amounts represent both average and ending balance figures. Assume that all sales were on credit. All amounts are in thousands except per share items. $\begin{array}{lr}\text { Assets }\\\text { Property, plant and equipment } &¥ 215,000 \\\text { Inventory } & 25,000 \\\text { Accounts receivable (net) } & 30,000 \\\text { Cash and short-term investments } & 40,000 \\\quad \text { Total Assets } & ¥ 310,000\\\\\text { Equity and Liabilities }\\\text { Shareholders' equity-ordinary } &¥ 155,000 \\\text { Non-current liabilities } & 95,000 \\\text { Current liabilities } & 60,000 \\\quad \text { Total Equity and Liabilities } &¥ 310,000\\\\\text { Income Statement }\\\text { Sales revenue } & ¥ 90,000 \\\text { Cost of goods sold } & 45,000 \\\text { Gross margin } & 45,000 \\\text { Operating expenses } & 20,000 \\\quad \text { Net income } &¥25,000\\\\\text { Number of ordinary shares } & 6,000 \\\text { Market price of ordinary shares } & \$ 20 \\\text { Dividends per share } & 1.00\end{array}$ What is the profit margin for Cheng?

• A) 50.0%
• B) 55.6%
• C) 23.5%
• D) 27.8%

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Definitions:

Downslope Marine

Describes processes or movements occurring towards the bottom of the ocean slope, often involving sediment transport from shallower to deeper waters.

Physical Weathering

The mechanical breakdown of rocks and minerals into smaller pieces by physical forces without changing their composition.

Oxidation

The chemical process during which a material combines with oxygen.

Frost Wedging

Process by which jointed rock is pried and dislodged by the expansion of ice during freezing.