If a company has a higher gross profit margin than other companies in the same industry, it means that the company
A)is more profitable overall.
B)has done a better job at maintaining marks-ups or controlling product costs relative to sales revenue.
C)has higher income from operations.
D)has done a better job in controlling its operating and other expenses relative to sales revenue.

Question

Quizplus · Accepted Answer

A higher gross profit margin indicates that a company has been more effective at maintaining mark-ups or controlling the costs of its products relative to its sales revenue. This metric specifically reflects the efficiency in the cost of goods sold and the ability to price products, rather than overall profitability, operational income, or the management of operating and other expenses.

If a Company Has a Higher Gross Profit Margin Than