Dresden Inc.has net sales of $1,200,000,cost of goods sold of $900,000,operating expenses of $200,000,interest expense of $30,000,and income tax expense of $10,000.The company's gross margin ratio is (round to the nearest tenth of a percent):

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The gross margin ratio is calculated as (Net Sales - Cost of Goods Sold) / Net Sales. For Dresden Inc., this is ($1,200,000 - $900,000) / $1,200,000 = $300,000 / $1,200,000 = 0.25 or 25%.