the central division of chemical company has a return on investment of 26% and an investment turnover of 1.57. what is the profit margin? round the percentage to two decimal places. a.19.87% b.24.84% c.16.56% d.13.25%

Respuesta :

The profit margin is 16.56% and option c is correct.

What is profit margin?

One of the often used profitability statistics to determine how profitable a business or line of business is is profit margin. It displays the proportion of sales that have generated profits. Simply put, the percentage value represents the amount of profit the company made on each dollar of sales.

For instance, if a company states that it had a 35% profit margin during the most recent quarter, that translates to $0.35 in net income for every $1 in sales.

Different profit margins come in different forms. However, in common usage, it typically refers to net profit margin, which is a company's bottom line after all other costs, such as taxes and one-time charges, have been deducted from revenue.

Profit margin = Return on investment/Investment turnover

⇒ Profit margin = 26% / 1.57

⇒ Profit margin = 16.56%

The profit margin is 16.56% and option c is correct.

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