Question

A company reports the following amounts at the end of the year:

Answer 1

Answer:

33.33%

Explanation:

Given:

Sales revenue = $360,000

Cost of goods sold = $240,000

Net income = $53,000

Now,

the gross profit = Sales revenue - Cost of goods sold

or

The gross profit = $360,000  - $240,000  = $120,000

Thus,

the company's gross profit ratio = $\frac{\textup{Gross Profit}}{\textup{Sales revenue}}$

or

The company's gross profit ratio =  $\frac{120,000}{\textup{360,000}$

or

The company's gross profit ratio = 33.33%