Which one of the following ratios is a common analytical tool used by merchandise corporations, but not by service corporations?

Question

Quizplus · Accepted Answer

The gross profit ratio is a common analytical tool used by merchandise corporations to measure the profitability of their sales. It compares the gross profit (sales revenue minus cost of goods sold) to sales revenue. Service corporations do not typically have cost of goods sold, as they do not sell physical products, so this ratio is not useful for them.

Which One of the Following Ratios Is a Common Analytical