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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