Firms should compare their gross, operating and net profit margins to past years and other companies in order to
A) evaluate the firm's performance.
B) identify expenses that seem to be out-of-line
C) better manage the reporting of the firm's earnings.
D) Both A and B.

Question

Quizplus · Accepted Answer

By comparing their gross, operating and net profit margins to past years and other companies, firms can evaluate their performance and identify expenses that seem to be out-of-line. This helps in better managing the reporting of the firm's earnings. Therefore, option D is the correct choice.

Firms Should Compare Their Gross, Operating and Net Profit Margins