Puffy's Pastries generates five cents of net income for every $1 in sales. Thus, Puffy's has a _____ of 5 %.

A) return on assets
B) return on equity
C) profit margin
D) Du Pont measure
E) total asset turnover

Question

Quentarius Jenkins · Accepted Answer

Final Answer : C, Explanation :  The given scenario describes the profit margin, which is the ratio of net income to sales. The profit margin is a measure of a company's profitability and indicates how much of each dollar sales result in profits after all expenses are paid. The given information does not provide data on assets or equity, so options A and B are not applicable. Du Pont measure involves both profit margin and total asset turnover, so it's not the correct choice in this scenario. Option E, total asset turnover, is not relevant since it doesn't relate to the given information. Therefore, the correct answer is C – profit margin.

Puffy's Pastries generates five cents of net income for every $1 in sales. Thus, Puffy's has a _____ of 5 %.

A) return on assets
B) return on equity
C) profit margin
D) Du Pont measure
E) total asset turnover

Definitions

Learning Objectives

Learning Objectives

Related questions

Puffy's Pastries generates five cents of net income for every $1 in sales. Thus, Puffy's has a _____ of 5 %.A) return on assetsB) return on equityC) profit marginD) Du Pont measureE) total asset turnover

Definitions

Learning Objectives

Learning Objectives

Related questions

Puffy's Pastries generates five cents of net income for every $1 in sales. Thus, Puffy's has a _____ of 5 %.

A) return on assets
B) return on equity
C) profit margin
D) Du Pont measure
E) total asset turnover