Which Financial Statement(s)do You Need to Calculate the Profit Margin

question 135

Multiple Choice

Which financial statement(s) do you need to calculate the profit margin ratio?

• A)only the income statement
• B)only the balance sheet
• C)both the income statement and the balance sheet
• D)both the statement of cash flows and the income statement

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Definitions:

Negative Goodwill

Occurs when the price paid for an acquisition is less than the fair market value of its net tangible assets, often recognized as a gain in the acquirer's financial statements.

Consolidated SFP

Consolidated Statement of Financial Position; a financial statement that presents the total assets, liabilities, and equity of a parent company and its subsidiaries as one single entity.

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Negative Goodwill

A financial situation where the price paid for an acquisition is less than the fair market value of its net tangible assets.