Principles of Managerial Finance, Student Value Edition Plus NEW MyLab Finance with Pearson eText -- Access Card Package (14th Edition)
Principles of Managerial Finance, Student Value Edition Plus NEW MyLab Finance with Pearson eText -- Access Card Package (14th Edition)
14th Edition
ISBN: 9780133740912
Author: Lawrence J. Gitman, Chad J. Zutter
Publisher: PEARSON
Question
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Chapter 3, Problem 1OR
Summary Introduction

To determine: The gross profit margin of the firm.

Gross profit margin:

It is a financial metric that helps to evaluate the financial soundness and business model by exposing the amount of proportion remaining from the revenues after the accounting for the cost of goods sold.

Expert Solution & Answer
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Answer to Problem 1OR

Hence, the gross profit margin of Company D is 16.19%.

Explanation of Solution

Given information:

It is given that the reported sales of Company D is $31.5 million and the cost of goods sold is $26.4 million.

Determine the gross profit margin of the company:

It is calculated by subtracting the sales from the cost of goods sold divided by sales.

Gross profit margin=SalesCost of goods soldSales=$31.5 million$26.4 million$31.5 million=$5.1 million$31.5 million=16.19%

Hence, the gross profit margin is 16.19%.

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Chapter 3 Solutions

Principles of Managerial Finance, Student Value Edition Plus NEW MyLab Finance with Pearson eText -- Access Card Package (14th Edition)

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