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11 Cards in this Set
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- Back
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What is the Gross Profit Ratio
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Gross Profit
--------------------- X 100 Net Sales |
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What is the Net Profit Ratio
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Net Profit
------------------ X 100 Net Sales |
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What is the Rate of Returns on Owner's Equity?
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Net Profit
----------------------------------- X 100 Average Owner's Equity |
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What is the Gross Profit Ratio?
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Gross Profit
---------------------- X 100 Net Sales |
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What does the Gross Profit Ratio indicate?
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It indicates the margin of profit avaiable to cover expenses.
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What can be done to improve the Gross Profit Ratio?
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- An increase in sales, with a less than preportional decrease in the COGS.
- A decrease in the COGS, with a less than preportional decrease in sales. |
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What is the Net Profit Ratio?
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Net Profit
------------------- X 100 Net Sales |
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What does the Net Profit Ratio indicate?
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It clearly indicated the margin of profitability.
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What can be done to improve the Net Profit Ratio.
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- Expense control methods
- Pricing practices - Selling techniques |
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What is the Rate Of Return On Owner's Equity?
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Net Profit
--------------------------------- X100 Avergage Owner's Equity |
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What does the Rate Of Return On Owner's Equity indicate?
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This ratio indicates the rate of return on Owner's equity invested in the business.
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