The net income of Denver Incorporated is $0.71 million.
Profitability margin is an example of a profitability ratio. Profitability ratios measures the efficiency that a business uses to derive profit from its assets. Profit margin measures the return on sales
Profit margin = net income / net sales
5% = net income / $14.2 million
Net income = $14.2 million x 0.05 = $0.71 million
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