Back Company sold merchandise on credit.Its gross profit ratio is 23%.The effect of this transaction is that the

Question

Quizplus · Accepted Answer

Selling merchandise on credit increases revenue and, assuming costs are controlled, increases net income, which in turn increases earnings per share. The gross profit ratio indicates profitability on sales, not direct impacts on financial ratios like current ratio or debt-to-equity ratio without considering other transactions.

Back Company Sold Merchandise on Credit