Indicate the type of each ratio listed below.
-Gross profit ratio
A)liquidity ratio
B)solvency ratio
C)profitability ratio

Question

Quizplus · Accepted Answer

Gross profit ratio is a profitability ratio that reflects the efficiency of a company's operations by calculating the percentage of revenue that remains after deducting cost of goods sold. It is not a liquidity ratio or solvency ratio that measure a company's ability to meet its short-term and long-term obligations, respectively.

Indicate the Type of Each Ratio Listed Below