Expense Ratios Are Useful Because They Are ______

question 11

Multiple Choice

Expense ratios are useful because they are ______.

• A) standards or guides
• B) absolute measures of profitability
• C) significant in the number that is computed
• D) error free

---

Definitions:

Market Price

The current price at which an asset or service can be bought or sold in an open and competitive market.

Gross Profit Percentage

A financial ratio expressing gross profit as a percentage of revenue, indicating the efficiency of production or service delivery.

Net Profit Margin Percentage

This is a financial metric that represents the percentage of revenue that remains as profit after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Cost of Goods Sold Percentage

A ratio that compares the cost of goods sold to the total sales revenue, indicating the efficiency of production and pricing.