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The 2014 Income Statement of Nasir Inc

Question 323

Essay

The 2014 income statement of Nasir Inc. shows operating revenues of $135,800, selling expenses of $40,310, general and administrative expenses of $33,990, interest expense of $880, and income tax expense of $13,090. Nasir's stockholders' equity was $250,000 at the beginning of the year and $345,000 at the end of the year. The company has 10,000 shares of stock outstanding at December 31, 2014.
Required:
Compute Nasir's profit margin. What other information would you need in order to comment on whether this ratio is favorable?

Correct Answer:

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Profit margin:
Net Income/Revenues = $47...

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