A component of operating efficiency and profitability, calculated by expressing net income as a percent of net sales, is the:
A) Price earnings ratio.
B) Profit margin ratio.
C) Accounts receivable turnover.
D) Acid-test ratio.
E) Merchandise turnover.

Question

Quizplus · Accepted Answer

The profit margin ratio is used to assess a company's efficiency and profitability by expressing net income as a percentage of net sales. It helps to measure how much profit a company generates from its revenue.

A Component of Operating Efficiency and Profitability, Calculated by Expressing