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the Gross Profit Margin, Operating Profit from Sales Margin and Operating Profit Margin,What does reflect on...

the Gross Profit Margin, Operating Profit from Sales Margin and Operating Profit Margin,What does

reflect on the company?

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Answer #1

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Gross Profit Margin reflects the profit generated by the company from its core business i.e. selling and buying/manufacture of goods. Gross profit is simply the sales minus the cost of goods sold.

Operating profit from sales margin determines the operating profits left out of sales after all operating expenses have been met. It the EBIT divided by the sales revenue.

Operating profit marginreflects the profit that the company generates from its operating activities i.e. day to day activities to keep the business going. This profit is before deducting taxes and interest expense.

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