A company has a profit margin of 3%. What does this suggest about its net income relative to its sales revenue?

• A. The company retains \$0.03 of net sales for every dollar of net income.
• B. The company retains \$3.00 of net income for every dollar of sales.
• C. The company retains \$0.03 of net income for every dollar of sales.
• D. The company retains \$0.30 of net income for every dollar of sales.

Answer: (C)