A component of operating efficiency and profitability,calculated by expressing net income as a percent of net sales,is equal to the:
A)Acid-test ratio.
B)Merchandise turnover.
C)Price earnings ratio.
D)Accounts receivable turnover.
E)Profit margin ratio.

Question

Quizplus · Accepted Answer

The profit margin ratio is calculated by dividing net income by net sales, and expressing it as a percentage. It is an important measure of the operating efficiency and profitability of a company.

A Component of Operating Efficiency and Profitability,calculated by Expressing Net