What does having a positive net profit margin indicate about a business?

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Prepare for the Publix Deli ROI Test with multiple choice questions and detailed explanations. Study thoroughly to enhance your understanding and perform well on your exam.

Having a positive net profit margin indicates that a business is generating profit after all its expenses have been deducted from its total revenue. This metric is crucial for evaluating the financial health of a company, as it shows how effectively a business is managing its costs relative to its sales. A positive net profit margin means that for every dollar of revenue generated, the business retains a portion as profit, which can be reinvested, distributed to shareholders, or used to cover unforeseen expenses.

In contrast, the other options suggest scenarios that do not accurately reflect the implications of a positive net profit margin. High operational costs would reduce, rather than indicate, a positive margin. Consistently losing money would result in a negative margin, thereby contradicting the premise of the question. Measuring customer satisfaction is unrelated to profit margins, as it focuses on customer perceptions and experiences rather than financial performance. Thus, the correct answer clearly demonstrates that a positive net profit margin reflects a business’s profitability after expenses.

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