What will be the effect on present gross profit ratio of 20% if their purchase of goods of rupees 25000
Answers
Answer:
25000*20/100
= 5000
Explanation:
it may bee the answer
The purchase will not make any difference in the gross profit ratio
Explanation:
The gross profit ratio determines if the company can reduce its selling price of its products to a certain percentage without getting any losses from the net sales.
Higher ratio is obviously considered as a better point for the business
Here in this case the firm is purchasing goods of 25000 from an analytical prospective a 20% gross profit ratio what says that the company can reduce its indirect expenses.
Since the company has a low gross profit ratio, they cannot reduce their sales prices to increase their quantity of sales. Thus the purchase will not make any difference in the gross profit ratio.
As the only thing that’s required in gross profit ratio is net sales and gross profit
TO KNOW MORE:
What is gross profit ratio?
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