The gross profit percentage is the ratio to watch if you are worried about increased competition.If the company lowers its prices to retain market share without lowering its cost of goods sold,its gross profit percentage will:

Question

Quizplus · Accepted Answer

Gross profit percentage = ((Net sales − Cost of goods sold)÷ Net sales)× 100
If the selling price per unit decreases and cost of goods sold per unit stays the same,the gross profit percentage will decrease.

The Gross Profit Percentage Is the Ratio to Watch If