Multiple Choice
Which of the following ratios is used to measure a firm's profitability?
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If XYZ Company has net sales of \$500,000 and net income of \$25,000, the profit margin is:
A company has income before taxes of \$100,000. Net sales are \$400,000 and gross profit is \$300,000. What is the profit margin, assuming the company has a 40% tax rate?