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
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.
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
Question : ___________measures the relationship between Operating Profit and Revenue from Operations, i.e., Net Sales.
Option 1: Operating profit ratio
Option 2: Operating ratio
Option 3: Net profit ratio
Option 4: Gross profit ratio
Question : What does Creditors Turnover Ratio take into account:
Option 1: Total credit purchases
Option 2: Total credit sales
Option 3: Total cash purchases
Option 4: Total cash sales
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