Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

14. Financial Statement Analysis

Ratios: Gross Profit Rate

Financial Accounting

14. Financial Statement Analysis

Ratios: Gross Profit Rate

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Multiple Choice

A company has sales of $300,000 and gross profit of $135,000. What is the gross profit percentage?

40%

45%

55%

60%

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Verified step by step guidance

Identify the formula for calculating the gross profit percentage: $ \text{Gross Profit Percentage} = \left( \frac{\text{Gross Profit}}{\text{Sales}} \right) \times 100 $.

Substitute the given values into the formula: Gross Profit = $135,000 and Sales = $300,000.

Calculate the fraction: $ \frac{135,000}{300,000} $.

Convert the fraction to a percentage by multiplying by 100.

Compare the calculated percentage with the given options to determine the correct answer.