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18QS

Expert-verified
Found in: Page 143

### Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

# Damita Company reported net income of $48,025 and net sales of$425,000 for the current year. Calculatethe company’s profit margin and interpret the result. Assume that its competitors earn an average profitmargin of 15%.

The net profit margin is 11.3%

See the step by step solution

## Step 1: Definition of net income

Net income is the income that remains after deducting all expenses from revenue.

## Step 2:  Calculation of net profit margin

Hence, the net profit margin of Damita Company is 11.3%

The net profit margin of Damita company is less than its competitor’s margin.