A companys profit margin decreased from 2016 to 2017 but sal

A company\'s profit margin decreased from 2016 to 2017, but sales didn\'t change Which of the following could be the cause? O A. Interest income decreased OB. Selling expenses increased O C. Cost of goods sold increased ( D. All of the above

Solution

Solution:

Profit Margin = Net Proft / Sales * 100

If sale is not changed and profit margin decreased it means either other income is decreased or expense is increased or both of them. Therefore

Interest income decreased will result in decreasing of profit margin

Selleing expenses increased will result in decreasing of profit margin

Cost of goods sold increased will result in decreasing of profit margin

Hence choice D - All of the above is correct.