Avocado Company has an operating income of $80,000 on revenues of $1,000,000. Average invested assets are $500,000 and Avocado Company has an 8% cost of capital. What is the profit margin? Solution Profit Margin = Income/Revenue X 100 = 80,000/1,000,000 X100 = 8% Answer A. 8% Summary: Profitability through financial ratios .