Which of the Following Statements About the Profit Margin Is

Multiple Choice

Which of the following statements about the profit margin is NOT true?

A) The profit margin indicates the percentage of sales revenue that ends up as profit.
B) If gross margin increases, the profit margin must increase.
C) If the asset turnover ratio remains constant and the profit margin increases, return on assets must have increased.
D) If the sales price decreases and expenses stay consistent, the profit margin will decrease.