Net Income Divided by Sales Is the Correct Formula for Calculating

question 66

Multiple Choice

Net income divided by sales is the correct formula for calculating:

• A) return on total assets.
• B) a current ratio.
• C) a liquidity ratio.
• D) profit margin on sales.
• E) a corporate evaluation.

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Definitions:

Company's Shares

Units of ownership interest in a corporation or financial asset, providing a portion of the company's profits and a claim on its assets to the shareholders.

Angel Investor

An affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.

Venture Capitalists

Investors who provide capital to startup companies and small businesses with long-term growth potential in exchange for equity.

Financial Support

Monetary assistance provided to individuals or organizations to help cover costs or fund activities.