The ratio that indicates an entity's overall mark-up on goods sold is the:
A) return on inventory ratio.
B) gross profit ratio.
C) inventory turnover ratio.
D) profit margin ratio.

Question

Quizplus · Accepted Answer

The gross profit ratio is the ratio of gross profit (sales minus cost of goods sold) to sales. It indicates the percentage of sales that represent the entity's profits after accounting for the cost of goods sold.

The Ratio That Indicates an Entity's Overall Mark-Up on Goods