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
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.
Question : ___________measures the relationship between Operating Profit and Revenue from Operations, i.e., Net Sales.
Question : Which of the following statements are false with respect of Net profit ratio?
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