The conclusion that a company was able to generate 79.5c of net profit for every dollar of sales reflects which of the following?
A) Operating leverage
B) Return on assets
C) Net profit margin
D) Asset turnover

Question

Quizplus · Accepted Answer

Net profit margin is a measure of how much profit a company makes for every dollar of sales. In this case, the company was able to generate 79.5c of net profit for every dollar of sales, indicating a high net profit margin. Operating leverage refers to the degree to which fixed costs are used to fund operations, return on assets is a measure of how much profit a company generates relative to its assets, and asset turnover is a measure of how efficiently a company uses its assets to generate revenue. While these measures are all related to profitability in some way, they do not specifically measure net profit margin.

The Conclusion That a Company Was Able to Generate 79