Which of the following ratios would be considered useful in assessing operating profitability?
A)Total debt to equity ratio
B)Acid-test ratio
C)Gross profit margin
D)Profit to equity ratio

Question

Quizplus · Accepted Answer

Gross profit margin is a ratio that shows the amount of profit a company makes on its sales after deducting the cost of goods sold. This ratio helps in assessing the operating profitability of the company. The other ratios mentioned in the options, such as total debt to equity ratio, acid-test ratio, and profit to equity ratio, do not directly reflect the operating profitability of the company.

Which of the Following Ratios Would Be Considered Useful in Assessing