1. Total net profit margin measures:

a. Net income dollars generated by each dollar of sales and is used to interpret managements ability to control expenses.

b. Return to common shareholders

c. Productive and efficient use of only property plant and equipment

d. Annual number of times inventory is turned into a sale

e. Ability of the firm to generate sales through the effective and efficient use of assets ______

2. T or F The total asset turnover component of the DuPont method measures the ability of management to generate sales through the effective and efficient use of property, plant and equipment. (if false, identify and correct the error) ______

3. If gross profit margin decreased from the prior year, this could be due to all the following, except:

a. Inventory cost increases and no selling price increase

b. Increasing sales prices and stable inventory costs

c. Sales mix has changed to lower margin products

d. Stable volume of sales, stable sales prices and rapidly rising inventory costs

e. Adoption of just-in-time inventory purchasing processes that have failed to capture expected efficiencies