Bavarian Sausage, Inc. Bavarian Sausage, Inc. posted the following balance sheet

Question

Bavarian Sausage, Inc. Bavarian Sausage, Inc. posted the following balance sheet and income statement. $185,000 125,000 115,000 Balance Sheet Cash Accounts Receivable Inventories Net Plant and Equipment S 50,000 125,000 225,000 Accounts Payable Notes Payable Long-term debt 350,000 150,000 Common Stock Retained earnings Total liabilities and Stockholders' Equity$925.000 525,000 Total Assets S925.000 Income Statement Sales $525,000 215,000 65.000 Cost of goods sold Depreciation Earnings before interest and taxes Interest expense 245,000 35.000 Net profit before 210,000 131.250 taxes Taxes (@ 62.5%) Net income $78.750 NARREND NPR?

Explanation / Answer

Net profit ratio (NPR) is a percentage of net income of net sales.

NPR = (Net income / Sales) × 100

         = ($78,750 / $525,000) × 100

         = 15%

Answer: NPR is 15%.

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