A company can have a positive gross profit margin and a negative net income margin is false.
A positive gross profit margin is the first step toward net profit and the higher a gross profit margin, the closer a company is to a high operating profit margin and high net income . On the other hand, the company worth nothing that net margin can be positive or negative.
The negative net income margin cause stockholders equity to decrease due to their balance will be closed at the end of each accounting year.
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