Martinez Corporation Reported Net Sales of $765,000 and Net Income

question 44

Multiple Choice

Martinez Corporation reported Net sales of $765,000 and Net income of $142,000. The Profit margin is:

• A) 81.4%.
• B) 1.86%.
• C) 18.56%.
• D) 5.39%.
• E) 539.0%.

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Definitions:

Average Total Assets

A measure used in financial analysis, calculated as the average of a company's total assets at the beginning and end of a period, providing insight into the investment in assets.

Sales

The total amount of revenue generated from the sale of goods or services by a company during a specific period.

Gross Method

An accounting method for recording purchases at the invoice price without deducting any cash discounts offered.

Sales Discounts

A reduction in the price of goods or services offered to customers to encourage prompt payment.