The gross profit ratio (GP ratio) is a profitability ratio that depicts the connection between gross profit and total net sales revenue. It is a common method for assessing a company's operational success. The ratio is calculated by dividing gross profit by net sales.
It is a popular method of assessing a company's operational success. The ratio is calculated by dividing gross profit by net sales. In other words, it measures how efficiently a company uses its resources and labour to manufacture and sell goods financially.
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