Changes in the Profit Margin Ratio Could Indicate Changes in Any

question 23

Multiple Choice

Changes in the profit margin ratio could indicate changes in any of the following EXCEPT changes in

• A) sales volume.
• B) product profitability.
• C) the cost structure.
• D) the pricing policy.

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Definitions:

Days' Cash

A measure of a company's financial stability, indicating how many days the company can continue to operate using only its available cash without needing additional income.

Year-end Value

The financial value of an asset or account as recorded at the end of the fiscal year, which is important for annual financial reporting.

Internal Controls

Internal controls are the mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Sarbanes-Oxley Act

A U.S. federal law that aims to protect investors by making corporate disclosures more reliable and accurate.