Question

how is the profit margin calculated? profit margin = (gross income / total expenses) × 100 profit margin = (net income / total revenue) × 100 profit margin = (net income × total revenue) / 100 profit margin = (gross income × total expenses) / 100

Explanation:

Profit margin measures the percentage of revenue that is profit (net income). The formula is (Net Income / Total Revenue) × 100. The first option uses gross income and total expenses (incorrect), the third multiplies net income and revenue (incorrect), and the fourth multiplies gross income and expenses (incorrect). Only the second option follows the correct profit margin formula.

Answer:

B. Profit Margin = (Net Income / Total Revenue) × 100