Which of the following measures is most useful in analyzing a company's ability to control expenses?
A)Debt-to-assets ratio.
B)Asset turnover ratio.
C)Net profit margin ratio.
D)Pro forma ratio.

Question

Quizplus · Accepted Answer

The net profit margin ratio measures the amount of profit a company earns per dollar of sales after deducting all expenses, including taxes and interest. Therefore, it provides a clear indication of how well a company is controlling its expenses. A higher net profit margin suggests that the company is effectively managing its costs and generating more profit from each dollar of sales.

Which of the Following Measures Is Most Useful in Analyzing