The ________ measures the percentage of each sales dollar remaining after ALL expenses, including taxes, have been deducted.
A) net profit margin
B) operating profit margin
C) gross profit margin
D) earnings available to common shareholders

Question

Quizplus · Accepted Answer

Net profit margin calculates the profitability of a company after all expenses have been deducted, including taxes. Therefore, it is the best choice for this scenario. Operating profit margin measures the profitability of a company after only operating expenses have been deducted, while gross profit margin measures the profitability of a company after only the cost of goods sold has been deducted. Earnings available to common shareholders is a measure of the net income that is available for distribution to common shareholders after all expenses have been paid, but it does not factor in taxes.

The ________ Measures the Percentage of Each Sales Dollar Remaining