Assume that you want to determine the profit margin for a company.Which one of the following financial statements is the best source of this information?
A)Statement of retained earnings
B)Statement of cash flows
C)Statement of stockholders' equity
D)Income statement

Question

Quizplus · Accepted Answer

The income statement provides information on the company's revenues and expenses, allowing for the calculation of the profit margin (net income divided by revenue). The statement of retained earnings shows changes in the company's retained earnings account, the statement of cash flows shows changes in cash and cash equivalents, and the statement of stockholders' equity shows changes in the company's equity accounts. None of these statements provide the necessary information to calculate the profit margin.

Assume That You Want to Determine the Profit Margin for a Company.Which