Which of the following ratios will not increase when net income increases?
A)Gross profit percentage.
B)Return on assets.
C)Return on equity.
D)Net profit margin.

Question

Quizplus · Accepted Answer

Gross profit percentage is calculated as gross profit divided by total revenue. It is independent of net income because it only takes into account the cost of goods sold and revenue. The other ratios listed are influenced by net income because they involve net income in their calculation.

Which of the Following Ratios Will Not Increase When Net