GK
ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Closing stock
|
|
|
Net cash sales
|
|
|
Net credit sales
|
|
|
Net total sales
|
Detailed explanation-1: -The gross profit ratio is calculated by dividing the gross profit by the net sales. To make it easier to read and compare, the result is usually multiplied by 100 so it can be expressed as a percentage. This allows you to determine what percentage of the company’s revenue is profit.
Detailed explanation-2: -Gross Profit Ratio=(Gross ProfitNet Sales)×100.
Detailed explanation-3: -Gross margin is expressed as a percentage. In order to calculate it, first subtract the cost of goods sold from the company’s revenue. This figure is known as the company’s gross profit (as a dollar figure). Then divide that figure by the total revenue and multiply it by 100 to get the gross margin.
Detailed explanation-4: -Net profit reflects the amount of money you are left with after having paid all your allowable business expenses, while gross profit is the amount of money you are left with after deducting the cost of goods sold from revenue. You need to calculate gross profit to arrive at net profit.
Detailed explanation-5: -The ratio measuring the relationship between gross profit and net sales is called as Gross Profit Ratio.