Company A has a profit margin on revenue of 8.5% and company B has a profit margin on revenue of 15%. Company A is the larger company in revenues. Which company is more profitable, and why?
A) Company A is less profitable because it is larger than company B.
B) Company B is more profitable because it is smaller than company A.
C) Company B is more profitable because it operates more efficiently than company A.
D) Company A is less profitable than Company B because it is an inefficient company.

Question

Quizplus · Accepted Answer

Company B is more profitable because it has a higher profit margin on revenue (15%) compared to Company A (8.5%), indicating it operates more efficiently in terms of converting revenue into profit, regardless of the overall size of the company.

Company a Has a Profit Margin on Revenue of 8