A company had net sales of $788,500 and cost of goods sold of $562,260. Its net income was $25,640. The company gross margin ratio equals what?
Gross Margin Ratio:
This is also known as the gross profit margin ratio. This is a profitability ratio through which the firm's gross margin is compared with the revenue generated by the firm. That means the ability of the firm to generate profit after deducting the cost of goods sold.
Answer and Explanation:
|Net sales||$ 788,500|
|Less: Cost of goods sold||$562,260|
|Divide: Net sales||$788,500|
|Gross maring ratio||28.69%|
Gross Margin Ratio is 28.69%
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from Financial Accounting: Help and ReviewChapter 5 / Lesson 17