Questions: Excerpts from Dowling Company's December 31, 2024 and 2023, financial statements and key ratios are presented below (all dollar values are in millions): Accounts receivable (net) 2024 2023 Net sales 20 31 Cost of goods sold 130 115 Net income 75 70 Inventory turnover 20 32 Return on assets 5.95 Equity multiplier 12.00 % 2.51 Dowling's 2024 profit margin is closest to: 14.2 % 15.4%

To determine Dowling's 2024 profit margin, we need to use the formula for profit margin, which is:

\[ \text{Profit Margin} = \left( \frac{\text{Net Income}}{\text{Net Sales}} \right) \times 100\% \]

From the provided data for 2024:

• Net Income = \$75 million
• Net Sales = \$20 million

Plugging these values into the formula gives:

\[ \text{Profit Margin} = \left( \frac{75}{20} \right) \times 100\% = 3.75 \times 100\% = 375\% \]

However, this result seems unusually high for a typical profit margin, suggesting there might be an error in the data provided for net sales or net income. Typically, profit margins are much lower, often below 100%.

Given the multiple-choice options:

• $14.2\%$
• $15.4\%$

Neither of these options matches the calculated 375%, indicating a potential issue with the data or a misunderstanding of the question context. However, based on typical business scenarios and the options provided, the profit margin should be a reasonable percentage of net sales.

Since the calculated value is not feasible, and considering the options, the answer should be the closest reasonable percentage. Without additional context or corrected data, it's challenging to determine the exact answer, but based on typical profit margins, one might expect a value closer to the provided options.

Therefore, the answer is likely to be one of the provided options, but without further clarification or corrected data, it's not possible to definitively choose between $14.2\%$ and $15.4\%$.