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The calculations for some profitability ratios are the same as the calculations for common-size analysis of the income statement. Which of the following profitability ratios would also be determined through
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20 votes
20 votes
The calculations for some profitability ratios are the same as the calculations for common-size analysis of the income statement. Which of the following profitability ratios would also be determined through a common-size analysis of the income statement?

a. Acid-test ratio
b. Debt-to-equity ratio
c. Earnings per share
d. Gross profit ratio

User Bavan
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1 Answer

12 votes
12 votes

Answer:

d. Gross profit ratio

Step-by-step explanation:

In the case of common size income statement analysis, the each and every item display in the income statement should be recognized as the percentage of sales

Also the formula of gross profit is

= Gross profit รท Sales

Therefore the option d is correct

User Dhivakar
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2.9k points
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