How Is Operating Profit Margin Percent Calculated

question 84

Multiple Choice

How is operating profit margin percent calculated?

• A) Gross margin divided by net sales
• B) Add operating and interest expenses together and divide by gross sales
• C) Net sales multiplied by gross margin
• D) Cost of goods sold divided by gross sales
• E) Divide operating profit by net sales

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Definitions:

Credit Sales

Sales made on credit, where the buyer purchases goods or services but payment is delayed according to terms agreed by both parties.

Operating Revenues

Revenues generated from a company's primary business activities.

Assets

Resources owned by a business that have economic value and are expected to provide future benefit.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back in the future.