Which of the following equations is correct?
A)Profit margin = net income/sales
B)Profit margin = assets + liabilities
C)Profit margin = revenue - expenses
D)Profit margin = net income/total assets
E)Profit margin = net income/stockholder's equity

Question

Quizplus · Accepted Answer

Profit margin is calculated by dividing net income by sales (or revenue), which measures how much out of every dollar of sales a company actually keeps in earnings.

Which of the Following Equations Is Correct