Which ratio computes the amount of net income generated by each $1 of sales?
A)EV multiple
B)Return on assets
C)Return on equity
D)Profit margin
E)Price-earnings ratio

Question

Quizplus · Accepted Answer

The ratio that computes the amount of net income generated by each $1 of sales is the profit margin. It is calculated by dividing net income by total revenue. The profit margin provides insight into a company's pricing strategy and cost structure, and it indicates how much profit a company is making on each dollar of sales.

Which Ratio Computes the Amount of Net Income Generated by Each