Which ratio would be most helpful to a business owner to measure the profit per dollar of sales?
A)Net sales to total assets
B)Net sales to working capital
C)Net profit on sales
D)Net profit to equity

Question

Quizplus · Accepted Answer

Net profit on sales (also known as profit margin) is the ratio that measures the amount of profit earned by a company for each dollar of sales generated. This ratio provides insight into the company's pricing strategy, cost structure, and overall profitability. Therefore, it is the most helpful ratio for a business owner to measure the profit per dollar of sales.

Which Ratio Would Be Most Helpful to a Business Owner