Anthony Corporation reported the following amounts for the year:
$\begin{array}{lr}
\text { Net sales } & \$ 296,000 \
\text { Cost of goods sold } & 138,000 \
\text { Average inventory } & 50,000
\end{array}$
Anthony's gross profit ratio is:

Question

Anthony Corporation reported the following amounts for the year: 
$\begin{array}{lr}
\text { Net sales } & \$ 296,000 \
\text { Cost of goods sold } & 138,000 \
\text { Average inventory } & 50,000
\end{array}$
Anthony's gross profit ratio is:

Quizplus · Accepted Answer

Gross profit is calculated as Net Sales minus Cost of Goods Sold. Gross Profit = $296,000 - $138,000 = $158,000. The gross profit ratio is then calculated as (Gross Profit / Net Sales) * 100 = ($158,000 / $296,000) * 100 = 53.4%.