Question

Rudy Company reports gross sales revenue of $5.2 million, net sales revenue of $5 million, and cost of goods sold of $3 million. Rounding to the nearest percent, the company's gross profit ratio would be

Answer 1

40 %

Step-by-step explanation:

Gross Profit ratio = Gross Profit / Net Sales x 100

where,

Gross Profit = Net Sales - Cost of Sales

= $2 million

thus,

Gross Profit ratio = $2 million/ $5 million x 100

= 40 %

The company's gross profit ratio would be 40 %