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Question : _____________ratio establishes a relationship between gross profit and Revenue from Operations, i.e. Net Sales.

Option 1: Net profit ratio

Option 2: Operating profit ratio

Option 3: Gross profit ratio

Option 4: None of the above


Team Careers360 20th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Gross profit ratio


Solution : Answer = Gross profit ratio.

The gross profit Ratio Establishes the relationship between gross profit and revenue from the operation. The gross profit ratio evaluates the proportion of gross profit generated from revenue. It measures the efficiency of production and sales processes, indicating the percentage of revenue retained after deducting the cost of goods sold.
Hence, the correct option is 3.

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