Question

Gross profit ratio is calculated by?   

A (Gross Profit/Gross sales)*100 Correct Answer Incorrect Answer
B (Net Profit/Net sales)*100 Correct Answer Incorrect Answer
C (Gross Profit/Net sales)*100 Correct Answer Incorrect Answer
D (Net Profit/Gross sales)*100 Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Gross profit ratio (GP ratio) is a profitability ratio that shows the relationship between gross profit and total net sales revenue. It is a popular tool to evaluate the operational performance of the business . The ratio is computed by dividing the gross profit figure by net sales. 

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