The Following Selected Data Come from Celebration Company's Income Statements

question 8

Multiple Choice

 The following selected data come from Celebration Company's income statements over three recent years. Based on the data, what is Celebration's profit margin for each of the three years, and do the ratios show deterioration or improvement in Celebration's profitability? Assume the industry average is 0.065 or 6.5%. 

• A) 0.039; 0.027; 0.023; weak but improving
• B) 0.39; 0.40; 0.41; weak but improving slightly
• C) 0.038; 0.026; 0.022; weak but improving
• D) 0.35; 0.34; 0.32; weak and deteriorating slightly

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Definitions:

Equation

A mathematical statement that asserts the equality of two expressions, usually written with an equals sign ("=").

Midpoint Method

A technique used in economics to calculate the elasticity of demand or supply by taking the average of the starting and ending prices and quantities.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating how prices can affect consumer purchasing decisions.

Equation

A mathematical statement that asserts the equality of two expressions, represented by the symbol "=".