select the option that best analyzes the PROFIT MARGIN for our example company. The profit margin indicates the amount of sales that are ultimately realized as income after all expenses

select the option that best analyzes the PROFIT MARGIN for our example company. The profit margin indicates the amount of sales that are ultimately realized as income after all expenses are considered. Profit margin is not a good measure of how well a company performs, so this information does not indicate how well our company is performing financially. The profit margin indicates the amount of sales that are ultimately realized as income after all expenses are considered. Our company retains between 15-20% of its sales as income, which is a comfortable profit margin. The profit margin indicates the amount of sales that are ultimately realized as income after all expenses are considered. Our company retains between 80-85% of its income as sales, which is a very high profit margin. The profit margin indicates the amount of sales that are ultimately realized as income after all expenses are considered. Our company retains between 80-85% of its income as sales, which is an unacceptable profit margin. Transcribed Image Text: Sample Products Co.
Income Statement
For the Five Months Ended May 31, 2017
Sales
$100,000
Cost of goods sold
Gross profit
75,000
25,000
Operating expenses
Selling expenses
Advertising expense
Commissions expense
Administrative expenses
2,000
5,000
7,000
Office supplies expense
Office equipment expense
Total operating expenses
3,500
2,500
6,000
13,000
Operating income
12,000
Non-Operating or other
Interest revenues
5,000
Gain on sale of investments
3,000
Interest expense
(500)
(1,500)
6,000
Loss from lawsuit
Total non-operating
Net Income
$ 18,000 Transcribed Image Text: Example Company
Balance Sheet
December 31, 2017
ASSETS
LIABILITIES
Current assets
Current liabilities
Notes payable
Accounts payable
Wages payable
Interest payable
Taxes payable
Warranty liability
Unearned revenues
Cash
$
2,100
$
5,000
Petty cash
Temporary investments
100
35,900
10,000
8,500
2,900
Accounts receivable – net
40,500
Inventory
Supplies
Prepaid insurance
Total current assets
31,000
3,800
6,100
1,100
1,500
1,500
89,000
Total current liabilities
61,000
Long-term liabilities
Notes payable
Bonds payable
Total long-term liabilities
Investments
36,000
20,000
Property, plant & equipment
400,000
420,000
Land
5,500
Land improvements
Buildings
Equipment
Less: accum depreciation
Prop, plant & equip – net
6,500
180,000
201,000
(56,000)
337,000
Total liabilities
481,000
Intangible assets
STOCKHOLDERS’ EQUITY
105,000
200,000
305,000
Goodwill
Common stock
110,000
Retained earnings
Accum other comprehensive income
Less: Treasury stock
Total stockholders’ equity
Trade names
220,000
9,000
(50,000)
289,000
Total intangible assets
Other assets
3,000
Total assets
$ 770,000
Total liabilities & stockholders’ equity
$ 770,000
The notes to the sample balance sheet have been omitted.

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