Which of the following measures the percentage of sales revenue a firm is able to retain after all expenses are deducted from gross revenues?
A)gross profit
B)net margin
C)operating margin
D)working capital

Question

Quizplus · Accepted Answer

Net margin, also known as net profit margin, is a financial metric that measures the percentage of sales revenue a firm is able to retain after deducting all expenses, including cost of goods sold, operating expenses, and taxes, from gross revenue. Gross profit only measures the profit a firm generates after deducting the cost of goods sold, while operating margin measures the percentage of sales revenue that remains after operating expenses are deducted. Working capital is a measure of a company's short-term liquidity and does not directly relate to revenue or profit. Therefore, the best choice is B, net margin.

Which of the Following Measures the Percentage of Sales Revenue