Use the following information to compute profit margin for each separate company a through e.

Exercise 3-10 Computing and interpreting profit margin LO A1

Use the following information to compute profit margin for each separate company a through e. (Round your answers to 1 decimal place.)

 

 

Which of the five companies is the most profitable according to the profit margin ratio?

 

    Company a
    Company b
    Company c
    Company d
    Company e



Answer
Company c

Explanation

Analysis and Interpretation: Company c has the highest profitability according to the profit margin ratio. Company c earns 35.0 cents in net income for every one dollar of net sales earned.