When comparing one company to another, what kind of information does the gross profit percentage provide?
A) How effective each company is at collecting its receivables
B) How well each company manages the financing of its assets
C) How profitable each company is based on the sale of its products
D) How much profit is generated by a share of stock of each company

Question

Quizplus · Accepted Answer

The gross profit percentage provides information on the profitability of each company based on the sale of its products. It is calculated by deducting the cost of goods sold from revenue and then dividing by revenue. It does not provide information on receivables, financing of assets, or stock profitability.

When Comparing One Company to Another, What Kind of Information