A retailer with a less-than-average profit margin could seek to increase its profit margin by _____.

Question

Quizplus · Accepted Answer

One way to increase profit margin is by reducing operating expenses. This means cutting costs in areas such as supplies, rent, utilities, and salaries. By doing so, the retailer can increase its net income without having to increase sales or raise prices, and thus improve its profit margin. Increasing asset turnover, financial leverage, or inventory turnover may have different impacts on the profit margin, but they do not directly address the issue of a low margin.

A Retailer with a Less-Than-Average Profit Margin Could Seek to Increase