Which of the Following Statements Is Not True Regarding the Gross

question 118

Multiple Choice

Which of the following statements is not true 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 competitors'.

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Definitions:

Purchase Money Securities Interest

A legal claim that allows a lender to have priority in a debtor's asset, provided the loan was used to purchase the asset.

Security

A document or other thing that stands as evidence of title to or interest in the capital, assets, property, profits, earnings, or royalties of any person or company, including any document commonly known as a security.

Chattel Mortgage

A legal arrangement where personal property is used as security for a loan, without the borrower surrendering possession of the property.

Secured Creditor

A lender who is given a specific asset as collateral for a loan, providing them with the right to claim said asset if the borrower defaults.