If a Company Increases the Selling Price of the Product

question 177

Multiple Choice

If a company increases the selling price of the product it sells and all other data on the financial statements remains the same,which of the following ratios will be unaffected?

• A)Fixed asset turnover
• B)Net profit margin
• C)Inventory turnover
• D)Earnings per share

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Definitions:

Income Statement

A financial report that shows a company's revenues, expenses, and profits over a specific period, indicating its financial performance.

Incurred

Refers to costs or expenses that have been recognized or acquired, usually due to a company's operations or activities.

Interest Expense

The cost incurred by an entity for borrowed funds, representing the price paid for the use of borrowed money or for delaying the repayment of a debt.

Operating Expense

Expenses incurred through normal business operations, like rent, utilities, and payroll.