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%.

(c) 40%.

(b) 12%.

(d) 200%.

Use the following financial statement information as of the end of each year to answer Self-Test Questions 12–16.

Transcribed Image Text:

2012 Inventory $ 54,000 2011 $ 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 4,000 Dividends paid to common stockholders 15,000 10,000