Which of the following is the formula to compute the rate of return on net sales?
A) The formula is (Net income - preferred dividends)/Average common stockholders' equity.
B) The formula is Net income/Net sales.
C) The formula is (Net income + interest expense)/Average total assets.
D) The formula is (Net income - preferred dividends)/Number of shares of common stock outstanding.

Question

Quizplus · Accepted Answer

The rate of return on net sales is calculated by dividing Net income by Net sales, which measures the profitability of a company in relation to its total sales.

Which of the Following Is the Formula to Compute the Rate