Management uses the following as a measure for assessing efficiency in producing and selling goods and services because it indicates the portion of each dollar of revenue that is profit.
A)Profit margin percentage.
B)Return on investment
C)Investment turnover ratio.
D)Revenue realization ratio.

Question

Quizplus · Accepted Answer

Profit margin percentage is the ratio of net income to revenue, which indicates the portion of each dollar of revenue that is profit. This measure shows how efficiently a company is controlling its costs and pricing its products. A higher profit margin is generally preferred as it reflects higher profitability for the company.

Management Uses the Following as a Measure for Assessing Efficiency