The Net Profit Margin Ratio

question 116

Multiple Choice

The net profit margin ratio:

• A) how much profit from each dollar of revenue.
• B) means improved performance if it decreases.
• C) means weaker performance if it increases.
• D) measures the percentage of assets financed by debt.

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Definitions:

Catalog List Price

The official selling price of a product as listed in a catalog, before any discounts or promotions are applied.

Credit Terms

The conditions under which a seller extends credit to a buyer, including payment deadlines, interest rates, and discounts for early payments.

Invoice Discount

A reduction in the billed price granted to customers, often used as an incentive for early payment.

Credit Terms

The agreement between a buyer and a seller that outlines the payment terms for goods or services, including the due date and any interest or penalties for late payment.