CFA Practice Question

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CFA Practice Question

What is another term for gross profit margin?

A. Operating profit
B. Earnings before interest and taxes
C. Income before taxes
D. Gross margin
Correct Answer: D

Gross profit margin is also known as gross margin.

User Contributed Comments 10

User Comment
Alfa1 Gross profit= gross margin
vincenthuang Gross margin= Gross profit/Sales
So the answer is wrong.
I think operating profit is the answer
tony1973 Operating profit is gross profit minus sales, general and administrative expenses (SG&A). It is also called EBIT.
Gina Gross Profit= Net Sales - COGS
Operating Profit=EBIT = [NI+InterestExp+IncomeTax]
db28luke Gross profit does not equal gross profit margin.
yanpz answer is correct
danlan EBIT=operating profit=gross profit-operating expense

Operating expense includes admin expenses, ...
gross profit=sales-COGS
sarath The two terms can be used interchangeably..
achu "Gross profit does not equal gross profit margin."
That's true, but Gross margin and Gross Profit Margin are synonymous. One could say the (profit) is implied.
leon121 Could this really be a CFA question??? It's too basic...................
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