What does the operating profit margin measure?

The operating profit margin is a financial metric that assesses the efficiency of a company's core business operations. It measures the percentage of revenue that remains after covering all operating expenses, excluding interest and taxes. By focusing on operating income, this margin offers insight into how well a company is managing its operational costs relative to its sales.

A higher operating profit margin indicates that a company retains more profit from each dollar of sales, reflecting effective control over costs and pricing strategies. Therefore, choosing the option that describes the effectiveness of a company's operations directly aligns with what the operating profit margin aims to evaluate.

In contrast, the other choices pertain to different financial aspects. For instance, net income as a percent of total assets relates to the return on assets, total liabilities pertains to the company's indebtedness, and gross profit as a percent of sales focuses on the profitability of goods sold before operational expenses are factored in. These metrics, while important, do not capture the specific operational focus of the operating profit margin as effectively as the correct choice does.