The Following Information Is Available for the Wooden Company From the Information Provided, Calculate Wooden's Profit Margin Ratio for

question 48

Essay

The following information is available for the Wooden Company:
$$\begin{array} { | l | r | r | r | } \hline & 2010 & 2009 & 2008 \\\hline \text { Net income } & \$ 2,630 & \$ 2,100 & \$ 1,850 \\\hline \text { Net Sales } & 36,500 & 32,850 & 31,200 \\\hline \text { Total assets } & 400,000 & 385,000 & 350,000 \\\hline\end{array}$$
From the information provided, calculate Wooden's profit margin ratio for each of the three years. Comment on the results, assuming that the industry average for the profit margin ratio is 6% for each of the three years.

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Definitions:

Price Hike

An increase in the selling price of goods or services, which can be due to factors like higher production costs, supply shortages, or increased demand.

Traceable Fixed Expense

A traceable fixed expense is a cost that can be directly linked to a specific business segment or department without influencing other areas of the business.

Net Operating Income

A measure of company profitability equal to revenue minus operating expenses, excluding taxes and interest.

Price Reduction

A decrease in the selling price of a product or service, often to increase demand or sales volume.