From the net income given, it can be deduced that the profit margin of the company is 9.79%.
First, we will calculate the receivable turnover. This will be:
= 365 days / 31.85
= 11.46 times.
Then, well calculate sales. This will be:
Sales = Receivable × Receivable turnover
Sales = 147900 × 11.46
Sales = 1694934
Then, the profit margin will be:
= Net income / Sales
= 165850 / 1694934
= 9.79%
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