Net Profit Margin Measures the Percentage of Each Sales Dollar

question 46

True/False

Net profit margin measures the percentage of each sales dollar remaining after all costs and expenses, including interest, taxes, and common stock dividends, have been deducted.

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Definitions:

Comprehensive Income

A measure of all changes in equity of a company that result from recognized transactions and other economic events of the period other than those resulting from investments by and distributions to owners.

Unrealized Gains

Profits from investments that have increased in value but have not yet been sold for cash.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenues.

Gain Contingencies

Potential increases in assets or decreases in liabilities that may occur as a result of a future event, and which are acknowledged in financial statements if they are probable and can be reasonably estimated.