The profit leverage effect (ratio)is calculated by
A) dividing 1.0 by the profit margin.
B) dividing pretax earnings by the cost of goods sold.
C) dividing sales by the cost of goods sold.
D) none of the above.

Name: The profit leverage effect (ratio)is calculated by A) dividing 1.0 by the profit margin. B) dividing pretax earnings by the cost of goods sold. C) dividing sales by the cost of goods sold. D) none of the above.
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Question

Quizplus · Accepted Answer

1.0 / profit margin is a ratio called the profit leverage effect.

The Profit Leverage Effect (Ratio)is Calculated by