The financial ratio used to evaluate the effectiveness of the pricing strategy and to calculate breakeven would be which of the following?
A) debt/equity ratio
B) working capital ratio
C) wages to sales ratio
D) inventory to sales ratio
E) gross profit margin

Question

Quizplus · Accepted Answer

The gross profit margin is used to evaluate the effectiveness of a pricing strategy as it reflects the portion of revenue that exceeds the cost of goods sold, which is crucial for calculating breakeven points.

The Financial Ratio Used to Evaluate the Effectiveness of the Pricing