Profit margin is equal to ________.
a. net income divided by total owners' equity
b. net income divided by total assets
c. net income divided by sales
d. none of these

Respuesta :

The correct answer is option C.

Profit margin is equal to net income divided by sales.

What is profit margin?

  • One of the often used profitability statistics to determine how profitable a business or line of business is is profit margin.
  • It displays the proportion of sales that have generated profits. Simply put, the percentage value represents the amount of profit the company made on each dollar of sales.
  • For instance, if a company states that it had a 35% profit margin during the most recent quarter, that translates to $0.35 in net income for every $1 in sales.

Different profit margins come in different forms. However, in common usage, it typically refers to net profit margin, which is a company's bottom line after all other costs, such as taxes and one-time charges, have been deducted from revenue.

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