A Firm's Profit Margin, or Return on Sales, Is Computed

question 9

Multiple Choice

A firm's profit margin, or return on sales, is computed by dividing ________.

• A) net income by net sales
• B) gross profit by net sales
• C) net income by gross profit
• D) net income by cost of sales
• E) operating income by gross profit

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Definitions:

Imperfect Estimates

Approximations or assessments that may not accurately reflect the true value or outcomes due to uncertainties or limited information.

Older Homes

Refers to houses that have been constructed in earlier time periods, often characterized by architectural styles of their era and possibly requiring more maintenance.

Expected Loss

The anticipated amount of loss a business might suffer due to risks identified in its operations or investments.

Secure Neighborhood

An area or community characterized by enhanced safety measures and low crime rates, providing a feeling of security for its residents.