Question : The gross profit ratio is the ratio of gross profit to ______.
Option 1: Net Cash Sales
Option 2: Net Total Sales
Option 3: Closing Stock
Option 4: Net Credit Sales
Answer (1)
24th Jan, 2024
Correct Answer: Net Total Sales
Solution : By dividing the gross profit amount by the total net sales, the gross profit ratio (also known as the GP ratio) is a financial statistic that assesses the effectiveness and success of a corporation. Additionally, the gross profit ratio can be stated as a percentage.
Hence the correct answer is option 2.
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