Regarding the Profit Margin Ratio,which of the Following Statements Is

Multiple Choice

Regarding the profit margin ratio,which of the following statements is incorrect?

A) The higher the profit margin ratio, the more sales dollars end up as profit.
B) The profit margin ratio is computed by dividing net sales by net income.
C) The profit margin ratio shows how much net income a business earns on every $1.00 of sales.
D) The profit margin ratio focuses on the profitability of a company and is often reported in the business press.