Answer:
profit margin ≈ 3.59 %
Explanation:
Total asset = $10, 100,000
Total asset turnover = 2.51 times
Return asset = 9 %
profit margin = ?
Total asset turnover = Net sales / Total assets
Net sales = Total assets × Total asset turnover
Net sales = 10, 100,000 × 2.51
Net sales =$25351000
The net income can be calculated as
Return on asset = Net income/ total asset
Net income = return on asset × total asset
Net income = 0.09 × 10,100,000
Net income = $909000
Let's find the profit margin
Profit margin = Net income/ Net sales
Profit margin = 909000/25351000
Profit margin = 0.0358565737
Profit margin = 0.0359 0r 3.58565737052 %
profit margin ≈ 3.59 %
