The ___________measures the percentage of profit earned on each sales dollar before interest and taxes.
A) gross profit margin
B) operating profit margin
C) net profit margin
D) earnings available to common shareholders

Question

Quizplus · Accepted Answer

Operating profit margin measures the percentage of profit earned on each sales dollar before interest and taxes. Gross profit margin only measures the percentage of profit earned on each sales dollar after deducting the cost of goods sold, whereas net profit margin measures the percentage of profit earned on each sales dollar after deducting all expenses, including interest and taxes. Earnings available to common shareholders refers to the amount of profit left after deducting all expenses, including interest and taxes, but also takes into account dividends paid to preferred shareholders.

The ___________Measures the Percentage of Profit Earned on Each Sales