What is the ideal ratio of gross profit ratio in detail
Answers
ANSWER
The gross profit margin ratio shows the percentage of sales revenue a company keeps after it covers all direct costs associated with running the business.
Explanation:
It is one of five calculations used to measure profitability. The others are return on shareholders’ equity, the net profit margin ratio, return on common equity and return on total assets.
Answer:
(Net revenue – direct expenses)Net revenue x 100% = Gross profit margin ratio
A gross profit margin ratio of 65% is considered to be healthy.
Explanation:
Profitability ratios assess a company's ability to earn profits from its sales or operations, balance sheet assets, or shareholders' equity. Profitability ratios indicate how efficiently a company generates profit and value for shareholders.