Profit margin can be calculated as
A)Sales revenue/average invested assets
B)Operating income/sales revenue
C)Operating income/average invested assets
D)Average invested assets/sales revenue

Question

Quizplus · Accepted Answer

The formula for profit margin is operating income divided by sales revenue. This measures the percentage of each dollar of sales that results in profit. Option A is the formula for return on investment, option C is the formula for return on assets, and option D is the inverse of the profit margin formula.

Profit Margin Can Be Calculated as