CH22 - Ratio Analysis

Cards (4)

  • Accounting ratios allows stakeholders to make judgements on how efficiency a bussiness is being run
  • Gross profit Margin:
    • Calculated using gross profit & sales
    • shows how efficient a business is at selling its product/service
  • Gross Profit Margin = Gross Profit/Net sales X 100
  • Net profit margin = Net profit / Net Sales x 100