A Component of Operating Efficiency and Profitability,calculated by Expressing Profit

question 71

Multiple Choice

A component of operating efficiency and profitability,calculated by expressing profit as a percentage of net sales,is the

• A)Acid-test ratio
• B)Merchandise turnover
• C)Price-earnings ratio
• D)Accounts receivable turnover
• E)Profit margin

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Definitions:

Effective Tax Rate

The average percentage of income that an individual or corporation pays in taxes, considering various deductions and credits.

Fair Value

The estimated market value of an asset, liability, or financial instrument at a given point in time.

Goodwill Impairment

A decrease in the value of a company's goodwill asset, indicating that the value of an acquired company's brand, customer base, or proprietary technology has declined.

Depreciation Expense

The allocation of the cost of a tangible asset over its estimated useful life to account for wear and tear, obsolescence, or decay.