Which of the Following Is the Correct Formula for Profit

question 92

Multiple Choice

Which of the following is the correct formula for profit margin ratio?

• A)Net profit ÷ Sales
• B)Net sales ÷ Average total assets
• C)Net profit × Capital invested
• D)Operating income ÷ Net sales

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Definitions:

Factor

A financial company that purchases receivables from businesses, providing them with immediate cash.

Impairment

Impairment is a reduction in the recoverable value of an asset below its carrying value, leading to an expense in the income statement.

Receivable

An amount of money owed to a company by its customers or clients for goods or services provided on credit.

IFRS

The International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) for the preparation of financial statements globally.