Peg had net sales of $28,496 million, its cost of goods sold was $19,092 million, and its net income was $997 million. Its gross margin ratio equals:
A) 3.5%.
B) 5.2%.
C) 33%.
D) 67%.
E) 149.3%.

Question

Quizplus · Accepted Answer

The gross margin ratio is calculated by dividing gross profit by net sales.

Gross profit = net sales - cost of goods sold = $28,496 million - $19,092 million = $9,404 million

Gross margin ratio = (gross profit / net sales) x 100% = ($9,404 million / $28,496 million) x 100% = 33%

Peg Had Net Sales of $28,496 Million, Its Cost of Goods