Which of the following is TRUE of the gross profit percentage?
A) Gross profit percentage is the same for companies in all industries.
B) Gross profit percentage is used to measure the solvency of a company.
C) The gross profit percentage is one of the most carefully watched measures of profitability.
D) A service company must show its gross profit percentage in its income statement.

Question

Quizplus · Accepted Answer

The gross profit percentage is a key measure of profitability and is closely monitored by analysts, investors, and management. A higher gross profit percentage indicates that a company is generating more revenue per dollar of sales, which can lead to higher profits. However, what constitutes a "good" gross profit percentage varies by industry and company.

Which of the Following Is TRUE of the Gross Profit