The gross profit margin a) is a quick and rough estimate of the cash a company's...

The gross profit margin

a) is a quick and rough estimate of the cash a company's business is generating after payment of operating expenses, interest, and taxes.

b) shows the percentage of after-tax profits paid out as dividends

c) measures the return on total investment in the enterprise

d) indicates the percentage of revenues available to cover operating expenses and yield a profit.

e) shows how much profit is earned on each dollar of sales, before paying interest charges and income taxes.

Expert Solution

Option E is correct

Shows how much profit is earned on each dollar of sales, before paying interest charges and income taxes.

Gross Profit = EBITDA

jeff jeffy answered 2 years ago

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If Gross Profit Margin is 55%, what is COGS %?

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Category Prior Year Current YearAccounts payable ??? ???Accounts receivable 320,715 397,400Accruals 40,500 33,750Additional paid in capital 500,000 541,650Cash 17,500 47,500Common Stock 94,000 105,000COGS 328,500 428,048.00Current portion long-term debt 33,750 35,000Depreciation expense 54,000 54,731.00Interest expense 40,500 41,017.00Inventories 279,000 288,000Long-term debt 339,670.00 401,877.00Net fixed assets 946,535 999,000Notes payable 148,500 162,000Operating expenses (excl. depr.) 126,000 161,905.00Retained earnings 306,000 342,000Sales 639,000 850,323.00Taxes 24,750 48,686.00What is the firm's current year gross profit margin?

What is Gross Profit communicating to us? What is Gross Margin communicating to us?

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