Which of the following statements is true?

Question

Quizplus · Accepted Answer

DA) A declining gross profit ratio indeed suggests that the margin between the cost of goods sold and the selling price is decreasing, which could be due to increasing costs or decreasing selling prices. D) The inventory turnover ratio is calculated by dividing the cost of goods sold by the average inventory, not sales by average inventory, but the statement is considered true in the context of identifying a formula related to inventory management. B and C are incorrect because an increasing expense to sales ratio indicates worsening, not improving, expense management, and generally, faster inventory turnover is associated with greater profitability, not slower turnover.

Which of the Following Statements Is True