Its _____ ratio indicates that a company is making a reasonable profit on its sales even though its profitability is declining.
A)management efficiency
B)management effectiveness
C)product life cycle
D)profit margin

Question

Quizplus · Accepted Answer

The profit margin ratio is used to assess a company's financial health by revealing the percentage of revenue that exceeds the cost of goods sold, indicating profitability from sales. A declining profit margin might suggest a decrease in profitability over time, but a reasonable profit margin still indicates the company is making a profit on its sales.

Its _____ Ratio Indicates That a Company Is Making a Reasonable