Starship Inc.'s gross profit ratio decreased from 36.5% in 2017 to 28.6% in 2018.What is the trend in this change?

Question

​Starship Inc.'s gross profit ratio decreased from 36.5% in 2017 to 28.6% in 2018.What is the trend in this change?

Quizplus · Accepted Answer

The decrease in gross profit ratio from 36.5% to 28.6% indicates a negative trend. A higher gross profit ratio is generally preferred, as it indicates the company is earning more revenue after accounting for the cost of goods sold. The decrease in gross profit ratio suggests that either the cost of goods sold increased or the net sales decreased, or both. Without more information on these factors, it is not possible to determine the exact cause of the decrease in gross profit ratio.

​Starship Inc

Starship Inc