Profit margin (Bottom line) is net profits divided by sales. (these are the same)
Net Profit: total rexpenses minus total revenue.
(139200+383100+5800+369990) = 898090
Total Sales = 1348000
1348000-898090 = 449910
Profit Margin is (449910/1348000) 33.376%
This looks like good. I would compare this to other companies within the sector prior to buying though. But a 30+% PM is nice. What is really impressive is this company has a Return on Equity (ROE) of 81.95%. That is nice.
ROE = Net Income (449910/549000) divided by Shareholder Equity
Answers & Comments
Verified answer
Add up all expenses: Income tax, Selling, Interest, G&A
Total Expenses = $ 898,090
Profit = Sales - Expenses = $ 449,910
Divide Profit by Sales to get Profit Margin = 33.37%
Profit margin (Bottom line) is net profits divided by sales. (these are the same)
Net Profit: total rexpenses minus total revenue.
(139200+383100+5800+369990) = 898090
Total Sales = 1348000
1348000-898090 = 449910
Profit Margin is (449910/1348000) 33.376%
This looks like good. I would compare this to other companies within the sector prior to buying though. But a 30+% PM is nice. What is really impressive is this company has a Return on Equity (ROE) of 81.95%. That is nice.
ROE = Net Income (449910/549000) divided by Shareholder Equity
All expenses prior to taxes are removed from Sales = $589,110.
Also 34% blended rate for fed = $139200/.34 + 155K avg deductions = so it should be around... $564411.76
That's my guess. Could be wrong though can't remember exact school book terminology
Its around $500,000 USD after taxes and expenses. Good hit that one!