Plano Corporation reported net income $24,000; net sales $400,000; and average assets $600,000 for 2012. What is the 2012 profit margin ratio?
(a) 6%.
(b) 12%.
(c) 40%.
(d) 200%.
Use the following financial statement information as of the end of each year to answer Self-Test Questions 12–16.
|
2012 |
2011 |
|
|
Inventory |
$ 54,000 |
$ 48,000 |
|
Current assets |
81,000 |
106,000 |
|
Total assets |
382,000 |
326,000 |
|
Current liabilities |
27,000 |
36,000 |
|
Total liabilities |
102,000 |
88,000 |
|
Common stockholders” equity |
240,000 |
198,000 |
|
Net sales |
784,000 |
697,000 |
|
Cost of goods sold |
306,000 |
277,000 |
|
Net income |
134,000 |
90,000 |
|
Tax expense |
22,000 |
18,000 |
|
Interest expense |
12,000 |
12,000 |
|
Dividends paid to |
||
|
preferred stockholders |
4,000 |
4000 |
|
Dividends paid to common |
10000 |
|
|
stockholders |
15,000 |