Sales margin measures the profitability of each sale and represents the percentage of each sales dollar that remains as profit after all expenses are covered. Option A is referring to return on investment (ROI), B is referring to sales-to-investment ratio, D is referring to investment turnover, and E is not a relevant measure.

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Sales Margin Shows

Question 10

Multiple Choice

Sales margin shows:

A) the amount of income generated by each dollar of capital investment.
B) the number of sales dollars generated by each dollar of capital investment.
C) the percentage of each sales dollar that remains as profit after all expenses are covered.
D) the amount of capital investment generated by each sales dollar.
E) the amount of capital investment generated by each dollar of incomE.

Correct Answer: