Explain the Difference Between the Gross Margin Ratio, the Operating

question 29

Essay

Explain the difference between the gross margin ratio, the operating margin ratio, and the profit margin ratio.

---

Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, not necessarily its market value.

Annual Coupon

The annual interest payment made to bondholders, typically fixed and expressed as a percentage of the bond's face value.

Income Effect

The change in an individual's or economy's income and how that change affects the quantity demanded of a good or service.

Real Income

Income of individuals or nations after adjusting for inflation, representing the actual buying power of the income.