Wal-Mart takes its net sales and subtracts the cost of goods sold during the previous period.The result is Wal-Mart's _____.
A) gross sales
B) net income
C) gross profit
D) net margin
E) net purchases

Question

Quizplus · Accepted Answer

Wal-Mart's gross profit is calculated by subtracting the cost of goods sold from its net sales. This represents the amount of revenue remaining after accounting for the direct costs associated with producing and selling the goods. A and E are incorrect because gross sales and net purchases do not account for the cost of goods sold. B and D are incorrect because they represent profitability ratios, not a measure of gross profit.

Wal-Mart Takes Its Net Sales and Subtracts the Cost of Goods