Question

last year electric autos had sales of $175 million and assets at the start of the year of $300 million. if its return on start-of-year assets was 11%, what was its operating profit margin

Answer 1

25.71% is the operating profit margin.

What does profit mean?

The cash that remains after paying your business expenses is your profit. Gross profit, operating profit, and net profit are the three primary types of profit. The largest profit is gross. The amount left over after paying for the sold products and services is displayed.

Briefing:

Amount of return on asset = Rate of return x Asset value

Amount of return on asset = 11% x $300,000,000

Amount of return on asset = $33,000,000

Operating profit margin = Amount of return on asset / Sales

Operating profit margin = $45,000,000 / $175,000,000

Operating profit margin = 0.257142

Operating profit margin = 25.71%

Therefore, operating profit margin is 25.71%

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Answer 2

25.71% is the operating profit margin of the electric auto sales in the start of the year.

What does profit mean?

The cash that remains after paying your business expenses is your profit. Gross profit, operating profit, and net profit are the three primary types of profit. The largest profit is gross. The amount left over after paying for the sold products and services is displayed.

Briefing:

Amount of return on asset = Rate of return x Asset value

Amount of return on asset = 11% x $300,000,000

Amount of return on asset = $33,000,000

Operating profit margin = Amount of return on asset / Sales

Operating profit margin = $45,000,000 / $175,000,000

Operating profit margin = 0.257142

Operating profit margin = 25.71%

Therefore, operating profit margin is 25.71%

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