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1 March, 15:02

A company had net sales of $752,000 and cost of goods sold of $543,000. Its net income was $17,530. The company's gross margin ratio equals:

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  1. 1 March, 15:25
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    The gross margin ratio is 27.8%

    Explanation:

    Gross Margin is an indicator of whether a company is running an efficient operation and if its sales are good enough

    The formula for calculating gross margin ratio is

    Total revenue - cost of goods sold : total revenue x 100

    Total revenue = $752,000,

    Cost of goods sold = $543,000

    therefore gross margin ratio

    $752,000 - $543,000 = $209,000

    $209,000 : $752,000 = 0.2779

    0.2779 * 100 = 27.79 ≅ 27.8%
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