Practice question
Statement 1: The Net Profit Margin ratio is calculated by dividing Net Profit by Revenue, and it shows the percentage of revenue retained as profit after all expenses are deducted. Statement 2: A higher Net Profit Margin indicates that the company has higher production costs and inefficiencies in managing expenses. Which of the following statements is true?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both statements are true.
- 2Statement 1 is true, but Statement 2 is false.✓
- 3Statement 1 is false, but Statement 2 is true.
- 4Both statements are false.
Correct answer
Statement 1 is true, but Statement 2 is false.
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