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11 Cards in this Set
- Front
- Back
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what is the gross profit ratio?
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Gross profit
__________ x 100 Net sale |
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what is net profit ratio?
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Net profile
--------------- x100 Net sale |
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What is the rate of return on owner's equity?
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Net profit
------------------------- x100 Average owner's equity |
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What is the net profit ratio?
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net profit
----------------- x100 net sales |
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What is the gross profit ratio?
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Gross profit
------------------ x100 Net sales |
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Define and describe the rate of return on owner's equity?
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The rate of return on owner's equity indicates the rate of return on owner's equity invested in the business.
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Define and describe net profit ratio?
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The net profit ratio shows how much of each dollar of sale represents net operating profit. it clearly indicates the margin of probablity of the firm.
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Define and describe the gross profit ratio?
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The gross profit ratio indicates the margin of profit availible to cover expenses.
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What are the strategies to improve the rate of return on owners equity?
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to improve this ratio, considaration should be given to any method mentioned above to increase profit or reduce owner's equity.
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What are the strategies to improve net profit ratio?
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Expense control methods
Pricing practices selling tchniques |
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What are the strategies to improve gross profit ratio?
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An increase to sale, with a less than proportional increase in the cost of goods sold.
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