What Ratio Indicates the Percentage of Each Sales Dollar That

question 113

Multiple Choice

What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit?

• A) margin of safety ratio
• B) contribution margin ratio
• C) costs and expenses ratio
• D) profit ratio

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Definitions:

Stock Purchased

Refers to the acquisition of shares in a company, typically for investment purposes.

Fair Value Adjustment

An accounting process to correct the book value of an asset or liability to reflect its accurate market value.

Balance Sheet

A financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time.

Investments

Assets or items acquired with the goal of generating income or appreciation in value over time.