The Following Data Is from the Income Statement of Ralston

question 100

Multiple Choice

The following data is from the income statement of Ralston Company:
$\begin{array}{lr}\text { Revenue } & \$ 36,000 \\\text { Cost of goods sold } & (14,400 ) \\\text { Operating expenses } & (16,000) \\\text { Net income } & \$ 5,600\end{array}$
What is the company's gross margin percentage?

• A) 66.67%
• B) 25.93%
• C) 60.00%
• D) 15.60%

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Definitions:

Liquidity Ratios

Financial ratios that measure a company's ability to meet its short-term obligations with its liquid assets.

Trade Credit

A type of commercial financing where a business allows its customers to purchase goods or services and pay for them at a later date.

Financial Leverage

Leveraging financing to heighten the potential outcomes of an investment.

Current Ratio

A metric that assesses an organization's capability to cover its current liabilities with its existing assets.