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How does prepaid expense and accrued expense affect the profit of a business?
it will either increase or decrease profit. Prepaid expense should increase profit as the amount has been overstated.
What is the Reason for the decrease in net profit margin?
A reason for the decrease in net profit margin is when an increase in business running expenses incur.
What happens when sales increase and gross profit margin decrease?
A simple answer - expenses increased somewhere within the business. If sales increase, then so should the profit margin theoretically. If the profit margin decreases, then expenses increased.
How do you increase Net Profit without affecting Gross Profit?
Net profit can be increased by income from non operating activities of business like dividend income or interest income etc.
Is profit maximization an appropriate for a business?
Profit maximization is the ONLY appropriate goal for a business. Even under a so-called "social responsibility" regime, a business only engages in such schemes because it thinks it can increase profits by doing so.
