Vol. 3 Income Statement Ratios Flashcards

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1
Q

Net profit margin [calculation]

A

net profit margin is also called profit margin
net profit margin = net income / revenue

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2
Q

Net profit margin [description]

A

measures the amount of income that a company was able to generate for each dollar of revenue

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3
Q

Gross profit margin [calculation]

A

gross profit margin = gross profit / revenue

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4
Q

Gross profit margin [description]

A

measures the amount of gross profit that a company generated for each dollar of revenue

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5
Q

Operating profit margin [description]

A

profit from operations divided by revenue

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6
Q

Pretax margin [description]

A

profit before tax divided by revenue

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