Profit Margin (Return on Sales) is calculated as:
A) Contribution Margin / Sales
B) Sales / Operating Income
C) Operating Income / Sales
D) Sales / Contribution Margin
E) None of the above

Question

Quizplus · Accepted Answer

Profit Margin, also known as Return on Sales, is calculated by dividing Operating Income by Sales. This ratio indicates how much of each dollar of sales a company keeps in earnings.

Profit Margin (Return on Sales) Is Calculated As