The Profit Margin Equals

question 166

Multiple Choice

The profit margin equals

• A) net sales divided by net income.
• B) gross margin divided by net income.
• C) net income divided by gross margin.
• D) net income divided by net sales.

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Definitions:

Inventory

The total value of a company's goods and materials held for sale or used in production.

Budgeted Production

The planned level of production output, determined based on forecasted sales and inventory requirements, to guide manufacturing processes.

Units

Basic quantities or measurements in which variables, constants, and other quantities are expressed in various contexts such as physics, chemistry, and mathematics.

Sales Forecast

The estimation of the amount of goods or services that will be sold during a future period.