Final answer:
The gross margin percentage is calculated by dividing the gross margin by the net sales revenue. It is a crucial profitability measure that reflects what percentage of sales contributes to gross profit, informing pricing and production strategies.
Step-by-step explanation:
The gross margin percentage is a measure of profitability that is calculated by dividing gross margin by net sales revenue. This calculation shows what percentage of sales revenue is comprised of gross profit, allowing businesses to understand how much money they retain after covering the cost of goods sold (COGS).
The correct option for calculating the gross margin percentage is d) dividing gross margin by net sales revenue. It's important for firms to understand and track their gross margin percentage as it provides insight into their financial health.
This figure helps to determine if a firm can earn profits given the current market price and informs strategies related to pricing, cost control, and production efficiency. The gross margin can help firms assess their economies of scale, diseconomies of scale, and average total cost to ensure they are operating effectively.