Calculating Profit Margin in Corporate Finance
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Questions and Answers

What is the simplest profitability metric according to the text?

  • Net profit margin
  • Operating profit margin
  • Net profit
  • Gross profit margin (correct)

    • What expenses are excluded from the cost of goods sold (COGS)?

  • Debt and taxes
  • Raw materials and labor wages
  • Operating and overhead costs (correct)
  • Equipment purchases

    • Which type of profit margin reflects the percentage of each revenue dollar retained as profit after paying for the cost of production?

  • Operating profit margin
  • Total revenue margin
  • Net profit margin
  • Gross profit margin (correct)

    • What is the most comprehensive level of profit calculated on an income statement?

    <p>Net profit</p> Signup and view all the answers

    What does COGS include according to the text?

    <p>Raw materials and labor wages</p> Signup and view all the answers

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