Asked by Annika Hogstrom on May 25, 2024
Verified
The ratio of income from operations to sales, which is also a factor in the DuPont formula for determining the return on investment, is called
A) profit margin
B) indirect expenses
C) investment turnover
D) cost
DuPont Formula
A formula that breaks down Return on Equity into three parts: profitability, operating efficiency, and financial leverage, to analyze a company's financial health.
Profit Margin
A profitability ratio calculated as net income divided by revenue, showing the percentage of profit made from sales.
Income From Operations
The profit realized from a business's operational activities, calculated before taxes and interest are deducted.
- Analyze and understand the net profit margin for branches or organizations.
- Understand the role of income from operations in financial analysis.
Verified Answer
Learning Objectives
- Analyze and understand the net profit margin for branches or organizations.
- Understand the role of income from operations in financial analysis.
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