Which of the following statements is not true regarding net profit margin?
A)If a company's net profit margin increases from 15% to 20% this would be considered an improvement in profitability.
B)A company with a net profit margin of 10% may be evaluated differently depending upon which industry it is in.
C)A company with a net profit margin of 10% is using 90% of each dollar of revenue to cover costs and expenses.
D)Net profit margin indicates how much revenue is earned for every dollar of net income.

Question

Quizplus · Accepted Answer

Net profit margin is calculated by dividing net income by revenue, so it indicates how much net income is earned for every dollar of revenue (not the other way around as stated in choice D). Choices A, B, and C are true statements regarding net profit margin.

Which of the Following Statements Is Not True Regarding Net