If net sales increases and cost of goods sold decreases, the gross profit ratio:

Name: If net sales increases and cost of goods sold decreases, the gross profit ratio:
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Question

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When net sales increase and cost of goods sold decreases, the gross profit ratio increases. This is because gross profit is calculated as net sales minus cost of goods sold, so a higher net sales and lower cost of goods sold means a greater gross profit which results in a higher gross profit ratio (gross profit/net sales).

If Net Sales Increases and Cost of Goods Sold Decreases