If a company has total sales of $500,000 and total expenses of $400,000, what is

₹0.0

Question: If a company has total sales of $500,000 and total expenses of $400,000, what is the profit margin?

Options:

Correct Answer: 20%

Solution:

Profit Margin = (Total Sales - Total Expenses) / Total Sales x 100 = ($500,000 - $400,000) / $500,000 x 100 = 20%.

If a company has total sales of $500,000 and total expenses of $400,000, what is the profit margin?

If a company has total sales of $500,000 and total expenses of $400,000, what is the profit margin?

Step 1: Identify the total sales amount, which is $500,000.
Step 2: Identify the total expenses amount, which is $400,000.
Step 3: Calculate the profit by subtracting total expenses from total sales: $500,000 - $400,000.
Step 4: The result of the subtraction is $100,000, which is the profit.
Step 5: To find the profit margin, divide the profit by total sales: $100,000 / $500,000.
Step 6: The result of the division is 0.2.
Step 7: To express the profit margin as a percentage, multiply the result by 100: 0.2 x 100.
Step 8: The final result is 20%, which is the profit margin.

Profit Margin – A financial metric that shows the percentage of revenue that exceeds total expenses, indicating the profitability of a company.