Vol. 3 LM1 Income Statement Ratios Flashcards

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1
Q

alternate names

net profit margin

p 45

A
  • profit margin
  • return on sales
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2
Q

Calculate

net profit margin

A

numerator: net income
denominator: revenue

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3
Q

define

net profit margin

p 45

A

measures the amount of income that a company was able to generate for each dollar of revenue

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4
Q

define

gross profit margin

p 45

A

numerator: gross profit
denominator: revenue

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5
Q

describe

gross profit margin

p 45

A

measures the amount of gross profit that a company generated for each dollar of revenue

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6
Q

describe

operating profit margin

p 46

A

profit from operations divided by revenue

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7
Q

describe

pretax margin

p 46

A

profit before tax divided by revenue

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