- 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
What is another term for gross profit margin?
B. Earnings before interest and taxes
C. Income before taxes
D. Gross 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................... |