A decrease in operating expenses would have which of the following effects on a company's profit margin?
A)Net profit margin would decrease.
B)Net profit margin would increase.
C)Net profit margin would remain unchanged.
D)There is not enough information given to determine the effect.

Question

Quizplus · Accepted Answer

Net profit margin = Net income ÷ Revenues
A decrease in operating expenses would increase net income.An increase in the numerator of this formula would increase the net profit margin.

A Decrease in Operating Expenses Would Have Which of the Following