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      Question

      Which of the following formulae correctly calculates the

      Operating Profit Margin?
      A EBIT/ Sales Correct Answer Incorrect Answer
      B PAT/ Sales Correct Answer Incorrect Answer
      C PBT/ Sales Correct Answer Incorrect Answer
      D Gross Profit/ Sales Correct Answer Incorrect Answer
      E Operating Expenses/Sales Correct Answer Incorrect Answer

      Solution

      Operating profit is given by EBIT or Earnings before Interest and Taxes.┬а Operating profit margin is a profitability ratio that tells how much profit per unit of sales, a company earns from its operations, before accounting for interest cost and taxes. Operating profit margin = EBIT/Sales

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