Exhibit 4.1 The balance sheet and income statement shown below are for Koski Inc. Balance Sheet (Millions of $) Assets 2014 Cash and securities $ 2,500 Accounts receivable 11,500 Inventories 16,000 Total current assets $30,000 Net plant and equipment $20,000 Total assets $50,000 Liabilities and Equity Accounts payable $ 9,500 Accruals 5,500 Notes payable 7,000 Total current liabilities $22,000 Long-term bonds $15,000 Total liabilities $37,000 Common stock $ 2,000 Retained earnings 11,000 Total common equity $13,000 Total liabilities and equity $50,000 Income Statement (Millions of $) 2014 Net sales $87,500 Operating costs except depreciation 81,813 Depreciation 1,531 Earnings bef interest and taxes (EBIT) $ 4,156 Less interest 1,375 Earnings before taxes (EBT) $ 2,781 Taxes 973 Net income $ 1,808 Other data: Shares outstanding (millions) 500.00 Common dividends $632.73 Int rate on notes payable & L-T bonds 6.25% Federal plus state income tax rate 35% Year-end stock price $43.39 Refer to Exhibit 4.1. What is the firm's operating margin?
3.46%
4.28%
3.85%
4.75%
3.12%