The gross margin percentage is a turnover ratio that measures the efficiency with which a company sells its products.

Question

Quizplus · Accepted Answer

The gross margin percentage measures the proportion of revenue that exceeds the cost of goods sold, indicating the profitability of a company's core activities, not the efficiency with which it sells its products. Efficiency in selling is more closely related to turnover ratios like inventory turnover.

The Gross Margin Percentage Is a Turnover Ratio That Measures