Junebag Corporation Reported Net Income $24,000; Net Sales $400,000; and Average

question 29

Multiple Choice

Junebag Corporation reported net income $24,000; net sales $400,000; and average assets $600,000 for 2020.What is the 2020 profit margin?

• A)6%
• B)4%
• C)40%
• D)67%

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Definitions:

Current Liabilities

Financial obligations of a business that are due and payable within one year, including accounts payable, short-term loans, and other short-term debts.

Common-size Percent

A financial analysis tool that converts income statement items into percentage of revenue, facilitating trend analysis and comparison.

Total Assets

The sum of all resources owned by a company, including cash, inventory, property, and equipment, reported on the balance sheet.

Cash

Liquid currency and readily accessible funds available in checking and savings accounts, often used to meet short-term financial obligations.