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Foundations Of Financial Management
Found in: Page 78
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

Low Carb Diet Supplement Inc. has two divisions. Division A has a profit of$156,000 on sales of $2,010,000. Division B is able to make only $28,800 onsales of $329,000. Based on the profit margins (returns on sales), which divisionis superior?

The profit margin of division A is 7.76%, and division B is 8.75%. Based on this, Division B of the company is superior.

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Step by Step Solution

Profit margin of division A:

Profit margin of division B:

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