The ratio of net income before taxes to net sales is known as what?

The ratio of net income before taxes to net sales is referred to as the profit margin ratio. This financial metric is essential because it illustrates how much profit a company makes for each dollar of sales after covering its costs, but before tax obligations. The profit margin is a key indicator of profitability, showing the efficiency with which a company converts its sales into profits.

In evaluating the other options, the current ratio is a liquidity measure that compares current assets to current liabilities, focusing on the company’s ability to pay short-term obligations. Inventory turnover indicates how often a company's inventory is sold and replaced over a period, serving as a measure of operational efficiency in managing inventory. The price-earnings ratio assesses a company's current share price relative to its earnings per share, providing insights into investor expectations and company valuation. None of these options relate to the relationship between net income before taxes and net sales, which is why the profit margin ratio is the correct answer.