To calculate the profit margin for Mouse Inc. for the year 20x1, we follow these steps:
1. Identify the net income for the year 20x1.
2. Identify the net sales for the year 20x1.
3. Use the profit margin formula:
[tex]\[ \text{Profit Margin} = \left( \frac{\text{Net Income}}{\text{Net Sales}} \right) \times 100 \][/tex]
Detailed Solution:
1. From the table, the net income for the year 20x1 is given as \[tex]$500 thousand.
2. Similarly, from the table, the net sales for the year 20x1 is given as \$[/tex]3500 thousand.
3. Now, substitute these values into the profit margin formula:
[tex]\[ \text{Profit Margin} = \left( \frac{500}{3500} \right) \times 100 \][/tex]
4. Simplify the fraction inside the formula first:
[tex]\[ \frac{500}{3500} = \frac{1}{7} \][/tex]
5. Then, multiply by 100 to express the margin as a percentage:
[tex]\[ \text{Profit Margin} = \left( \frac{1}{7} \right) \times 100 \approx 14.29 \% \][/tex]
Therefore, the profit margin for Mouse Inc. for the year 20x1 is approximately 14.29%.
