The Higher the Net Profit Margin of a Company, the More

question 64

True/False

The higher the net profit margin of a company, the more money the company earns.

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Definitions:

Net Operating Income

The earnings a business retains after subtracting operational costs, prior to the deduction of interest and taxes.

Total Contribution Margin

The difference between a company's sales revenue and variable costs, representing the amount available to cover fixed costs and contribute to profit.

Net Operating Income

A measure of a company's profitability excluding interest and tax expenses.

Operating Income

This is the profit realized from a business's operations, calculated by subtracting operating expenses from gross profit.