Profit margin is defined as:
A) Revenues divided by net sales.
B) Net sales divided by assets.
C) Net income divided by net sales.
D) Net income divided by assets.
E) Net sales divided by net income.

Question

Quizplus · Accepted Answer

Profit margin is calculated as the ratio of net income to net sales, which gives us an indication of how much profit is generated for each dollar of sales made. A higher profit margin indicates that the company is more efficient at generating profits from its sales. Revenues and assets are not directly involved in calculating profit margin.

Profit Margin Is Defined As