The gross margin is divided by revenues to calculate the __________?
Correct answer: D. Gross margin percentage
- A. income margin percentage
- B. sales margin percentage
- C. cost margin percentage
- D. Gross margin percentage
Explanation
Gross margin divided by revenue measures the portion of sales remaining after cost of goods sold, so it is the gross margin percentage. The other options are not the standard name for this ratio.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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