The following information is available for Hatter Co. ?201720162015Net income2,5001,7001,900Net sales37,00035,00032,000Total assets420,000395,000375,000From the information provided, calculate Hatter's profit margin ratio for each of the three years. In 2016, economic conditions and a slowing economy impacted the results of operations. Comment on the results, assuming that the industry average for the profit margin ratio is 7% for each of the three years.
What will be an ideal response?
| ? | ? | ? | _2017_ | ? | _2016 | ? | _2015_ | ? |
| ? | NI | ? | $ 2,500 | ? | $ 1,700 | ? | $ 1,900 | ? |
| Profit margin = | Sales | ? | $37,000 | ? | $35,000 | ? | $32,000 | ? |
| ? | ? | ? | ? | ? | ? | ? | ? | ? |
| ? | ? | ? | 6.8% | ? | 4.9% | ? | 5.9% | ? |
Hatter Co. did rebound from the slowing economy and increased the profit margin to 6.8% in 2017, which is just short of the industry average of 7%. If Hatter's sales and profits continue to increase at the same rate for next year, the company will exceed the 7% profit margin ratio.
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