- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 2. Analyzing Income Statements
- Subject 6. Income Statement Ratios and Common-Size Analysis
CFA Practice Question
Which profitability ratio considers all revenues and expenses?
B. Operating profit margin
C. Net profit margin
A. Gross profit margin
B. Operating profit margin
C. Net profit margin
Correct Answer: C
The net profit margin is equal to net earnings divided by net sales. The net earnings figure is computed by subtracting total expenses from total revenues.
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