If net profit measures the profitability of an entire firm,then what measures the profitability of merchandising activities?
A) Accounts receivable
B) Asset turnover
C) Gross margin
D) Owner's equity
E) Shrinkage

Question

Quizplus · Accepted Answer

Gross margin measures the profitability of merchandising activities by calculating the difference between the selling price of goods and the cost of goods sold. It represents the profit earned from each sale. Accounts receivable measures how much money customers owe the firm, asset turnover measures how efficiently a firm is using its assets to generate revenue, owner's equity represents the residual interest in the assets of the firm after liabilities are deducted, and shrinkage is the loss of inventory due to theft or damage.

If Net Profit Measures the Profitability of an Entire Firm,then