Question

Kijijo Auctions runs an online auction company. Its end-of-year financial statements indicate the following results. Total assets = $240,000 Total liabilities = $130,000 Common stock = $24,000 Dividends = $6,400 Expenses = $94,000 Retained earnings (beginning of year) = $29,000 Required: Calculate the company’s net profit margin expressed as a percent. (Round your answer to the nearest whole percent.)

Answer 1

Answer:

40%

Explanation:

Total assets. $240,000

Less total liabilities ($130,000)

$110,000

Less common stock ($24,000)

Retained earnings at end $86,0000

Less Retained earnings at the beginning ($29,000)

Addition to retained earnings $57,000

Add dividends $6,400

Net profit earned $63,400

Add expenses $94,000

Revenue. $157,400

Therefore, company's net profit margin expressed as a percentage = Net profit earned / Revenue

= (63,400/157,400) × 100

= 40%