Company A and Company B both report the same level of sales and net income.Therefore,
A) both A and B will report the same Earnings Per Share.
B) both A and B will report the same Gross Profit Margin.
C) both A and B will report the same Net Profit Margin.
D) both A and C are true.

Question

Quizplus · Accepted Answer

Net profit margin is calculated as net income divided by sales, and since both companies report the same level of sales and net income, their net profit margins will also be the same. Earnings per share and gross profit margin are not necessarily the same even if the sales and net income are the same, as they are affected by factors such as the number of shares outstanding and cost of goods sold, respectively. Therefore, options A and B are not correct. Option D is also not entirely correct as option A is not true.

Company a and Company B Both Report the Same Level