Select the incorrect statement regarding net margin.
A)Net margin refers to the average amount of each sales dollar remaining after all expenses are subtracted.
B)Net margin may be calculated in several ways.
C)The smaller the net margin the better.
D)The amount of net margin is affected by a company's choices of accounting principles.

Question

Quizplus · Accepted Answer

The statement "The smaller the net margin the better" is incorrect. Generally, a higher net margin is considered to be better as it indicates that the company is able to generate more profit from each sales dollar after covering all expenses.

Select the Incorrect Statement Regarding Net Margin