Net Income Divided by Net Sales Is Equal to The

question 1

Multiple Choice

Net income divided by net sales is equal to the:

• A)Return on total assets.
• B)Profit margin.
• C)Current ratio.
• D)Total asset turnover.
• E)Days' sales in inventory.

---

Definitions:

Monopolistic Competitor

Refers to a market structure where many firms sell products that are similar but not identical, each having some control over its price due to product differentiation.

Excess Capacity

The situation in which a company can produce more goods or services than currently demanded, often leading to inefficiency.

Marginal Revenues

Marginal Revenues represent the additional income that a firm receives from selling one more unit of a good or service.

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and pricing above marginal cost due to product differentiation.