Firms should compare their gross, operating and net profit margins to past years and other companies in order to [blank].
A)evaluate the firm's performance
B)identify expenses that are illegal
C)better manage the reporting of the firm's earnings
D)ensure that income statements are compiled on a cash basis

Question

Quizplus · Accepted Answer

Comparing profit margins over time and with other companies allows firms to evaluate their performance and identify areas for improvement. It is not related to identifying illegal expenses, managing earnings reporting, or ensuring that income statements are on a cash basis.

Firms Should Compare Their Gross, Operating and Net Profit Margins