When comparing one company to another,what kind of information does the gross profit percentage provide?
A)How effective each company is at collecting its receivables
B)How profitable each company is based on the sale of its products
C)How much profit is generated by a share of each company
D)How well each company manages the financing of its assets

Question

Quizplus · Accepted Answer

The gross profit percentage provides information about how profitable each company is based on the sale of its products. It is calculated by subtracting the cost of goods sold from the total revenue and dividing that number by the total revenue. Therefore, it provides a measure of the efficiency of each company's production process in generating profits.

When Comparing One Company to Another,what Kind of Information Does