After revenue,the next two important earnings-quality components are:
A)cost of goods sold and the resulting gross profit.
B)operating expenses and the resulting net income.
C)cost of goods sold and the resulting net income.
D)operating expenses and the resulting total costs.

Question

Quizplus · Accepted Answer

Cost of goods sold (COGS) and the resulting gross profit are crucial for assessing earnings quality because they directly affect a company's profitability. Gross profit, derived from revenue minus COGS, provides insight into the efficiency of production and the cost management of a company.

After Revenue,the Next Two Important Earnings-Quality Components Are