TESTINGGG

What does Gross Profit Margin measure?

• Profitability after all expenses

• Profitability before taxes

• The efficiency of managing production costs

• Revenue growth potential

What does Net Profit Margin represent?

• The efficiency of managing production costs

• Gross Profit before taxes

• Profitability before taxes

• Profitability after all expenses

A higher Gross Profit Margin indicates better efficiency in managing production cost ?

• False

• Maybeee

• True

Net Profit Margin is a percentage that shows the proportion of revenue that represent profit after all expenses

• True

• Could be ~

• False

When making strategic decisions, why is it crucial for a business owner to consider both Gross Profit Margin and Net Profit Margin?

• Gross Profit Margin reflects operational efficiency, while Net Profit Margin indicates overall profitability

• Gross Profit Margin is for short-term decisions, and Net Profit Margin is for long-term decisions

• Net Profit Margin is more important than Gross Profit Margin in decision-making

• Gross Profit Margin is more important than Net Profit Margin in decision-making

A business with a high Net Profit Margin but a low Gross Profit Margin is likely:

• Operating efficiently in terms of production costs

• Experiencing a decline in overall profitability

• Operating inefficiently in terms of production costs

• Experiencing a surge in overall profitability