Subtraction of total operating expenses from sales yields:
A)net income.
B)gross margin.
C)operating profit.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Subtracting total operating expenses from sales yields operating profit, also known as earnings before interest and taxes (EBIT). This is not the same as net income, which includes interest expense and taxes. Gross margin is the difference between the cost of goods sold and sales revenue, and is not the same as operating profit. Therefore, option C is the correct answer.

Subtraction of Total Operating Expenses from Sales Yields