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Brief Exercise 12-4 Calculate Profit Margin

Jim's Computer Warehouse produced net income of $150,000 and cost of goods sold of $400,000 for the year. Net sales were $980,000.

Required:

Calculate Jim's profit margin for the year. Round percentages to one decimal point (i.e., 12.8%). _________________ %

Jim's profit margin ratio is _________________ which indicates the ability to _________________ .