If a business has total revenues of $500,000 and total expenses of $350,000, wha

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Question: If a business has total revenues of $500,000 and total expenses of $350,000, what is the profit margin?

Options:

Correct Answer: 30%

Solution:

Profit margin is calculated as (Total Revenues - Total Expenses) / Total Revenues. Here, ($500,000 - $350,000) / $500,000 = 30%.

If a business has total revenues of $500,000 and total expenses of $350,000, what is the profit margin?

If a business has total revenues of $500,000 and total expenses of $350,000, what is the profit margin?

Step 1: Identify the total revenues, which is $500,000.
Step 2: Identify the total expenses, which is $350,000.
Step 3: Calculate the profit by subtracting total expenses from total revenues: $500,000 - $350,000.
Step 4: The result of the subtraction is $150,000, which is the profit.
Step 5: To find the profit margin, divide the profit by total revenues: $150,000 / $500,000.
Step 6: Calculate the division to get 0.3.
Step 7: Convert 0.3 to a percentage by multiplying by 100, which gives you 30%.

Profit Margin – Profit margin is a financial metric that shows the percentage of revenue that exceeds total expenses, indicating the profitability of a business.