Which of the following is correct?

Question

Quizplus · Accepted Answer

Gross margin is calculated by dividing gross profit by net sales, which provides a percentage that represents how much of each dollar of revenue is available to cover operating expenses and contribute to net income.

None of the other options are correct:
- A) Return on assets should use average total assets, not current assets.
- C) Operating margin should use operating income divided by net sales, not total assets.
- D) Return on assets should use total assets, not fixed assets.
- E) Return on equity should use average shareholder's equity, not retained earnings.

Which of the Following Is Correct