A company has net income of $148,000 and a net profit margin ratio of .087. Which of the following is not a true statement?
A)A net profit margin ratio of .087 means that 8.7 cents of profit or net income is made for each dollar of sales.
B)The amount of sales revenue for this period is $1,700,000 (rounded to the nearest hundred thousand).
C)A higher net profit margin ratio this year than last year indicates an improvement in controlling expenses.
D)If income from operations is less than net income,this means that the company had no non-operating revenue.

Question

Quizplus · Accepted Answer

The statement "If income from operations is less than net income, this means that the company had no non-operating revenue" is false. Income from operations only includes revenue and expenses directly related to the core operations of the business, while net income includes all revenue and expenses, including non-operating items such as investments, interest income, and taxes. Therefore, it is possible for a company to have non-operating revenue and still have income from operations that is less than net income.

A Company Has Net Income of $148,000 and a Net