Which One of the Following Statements Is False Regarding the Gross

question 86

Multiple Choice

Which one of the following statements is false regarding the gross profit ratio?

• A) The gross profit ratio is calculated by dividing net sales by gross profit.
• B) The gross profit ratio is a measure of profitability.
• C) The gross profit ratio can help investors decide whether or not to buy a company's stock.
• D) The gross profit ratio should be compared with both a company's prior years' ratios and also competitor ratios.

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