Question

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

Sales revenue $ 360,000
Cost of goods sold 240,000
Net income 53,000

Compute the company's gross profit ratio. (Round your final answer.)

Answer 1

33.33%

Step-by-step 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 =

or

The company's gross profit ratio = 33.33%