Which of the following statements is true regarding the use of the operating profit margin as a performance measure?
A)It includes the assets that produced the income.
B)It ignores the assets that produced the income.
C)It is calculated as net income divided by sales.
D)It is calculated as sales divided by operating income.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

Operating profit margin only considers the profitability of the company's operations, ignoring any income or expenses not directly related to its core operations, such as interest income, interest expenses, taxes, and non-operating gains or losses. It does not consider the assets that produced the income. The formula for calculating operating profit margin is operating income divided by sales. Therefore, options A, C, D, and E are incorrect.

Which of the Following Statements Is True Regarding the Use