Asked by Ariah Scales on May 07, 2024
Verified
A 15% change in sales will result in a 15% change in net income.
Net Income
The remaining earnings of a company post all tax and expense deductions from its total sales.
- Develop skills in interpreting the effects of financial decisions on ratios and overall company performance.
Verified Answer
BD
Brian DeleslineMay 12, 2024
Final Answer :
False
Explanation :
The relationship between sales and net income depends on the company's profit margin. If the profit margin is constant, then a 15% change in sales will result in a 15% change in net income. However, if the profit margin varies, then the change in net income will not necessarily be the same as the change in sales.
Learning Objectives
- Develop skills in interpreting the effects of financial decisions on ratios and overall company performance.
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