Final answer:
To determine how profitable each product was last year by viewing their Gross Margins, one should consult the income statement or a detailed profitability report.
Step-by-step explanation:
To see the Gross Margins for each product, which reflects how profitable each of your products was last year, you should look at the income statement or a detailed profitability report. These reports typically list the Sales Revenue and Cost of Goods Sold (COGS), which allows you to calculate the Gross Margin by subtracting COGS from the Sales Revenue. The Gross Margin reveals the firm's ability to generate profit before accounting for overhead, taxes, interest, and other expenses.
The Gross Margin is crucial for understanding a firm's operational efficiency. By analyzing this metric, you can deduce whether a product is contributing positively to the firm's bottom line. Accounting profit, which is total revenues minus explicit costs including depreciation, can be gleaned from here to comprehend the firm's financial health.