Profit Margin Is Calculated by Dividing

question 92

Multiple Choice

Profit margin is calculated by dividing

• A)sales by cost of goods sold.
• B)gross profit by net sales.
• C)profit by shareholders' equity.
• D)profit by net sales.

---

Definitions:

Pension Plan

A retirement plan that outlines the benefits that employees will receive upon retirement, which is funded by contributions from the employer, the employee, or both.

Corridor

In financial terms, a corridor can refer to the allowable range of values for financial instruments or within financial models to trigger certain actions or constraints.

Prepaid Pension Asset

An asset on the balance sheet that occurs when a company pays more into a pension plan than the current cost recognized for the benefits related to the period.

Pension Expense

The cost to a company for maintaining a defined benefit pension plan, including service cost, interest cost, expected return on plan assets, and any amortization of past service costs.