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The Blue Lagoon has a return on equity of 23.62 percent, an equity multiplier of 1.48, and a capital intensity ratio of 1.06. What is the profit margin

Answer :

The profit margin is 16.92 percent.

Step 1

return on equity = 23.62 percent

capital intensity ratio = 1.06

equity multiplier = 1.48

Step 2

Profit margin = 23.62/[(1 / 1.06) ×1.48]

⇒ 0.1692 × 100

⇒16.92 percent

The profit margin is 16.92 percent.

How are profit margins determined?

The formula for profit margin

  • Get your COGS (cost of goods sold) information.
  • Find out your income (the price at which you sell these items, for instance $50).
  • Subtract the cost from the income to arrive at the gross profit.
  • Gross profit divided by revenue: $20 / $50 Equals 0.4 .
  • Put it in percentage form: 0.4 x 100= 40%

learn more about profit margin here https://brainly.com/question/10218300

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