Net Income Divided by Sales Is the Correct Formula for Calculating

question 159

Multiple Choice

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

• A) return on assets.
• B) the current ratio.
• C) the quick ratio.
• D) profit margin on sales.
• E) gross margin.

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Definitions:

Price

The amount of money or its equivalent paid or charged for something, often determined by supply and demand.

Standardization

The process of establishing common standards or norms to ensure that products, services, or processes are consistent and compatible.

Futures Contracts

Standardized legal agreements to buy or sell something at a predetermined price at a specified time in the future, often used for commodities or financial instruments.

Liquidity

The ease with which an asset or security can be converted into cash without affecting its market price.