a-company-reports-net-sales-of-1000000-and-a-gross-profit-of-400000-what-is-the-

Question

A company reports net sales of $1,000,000 and a gross profit of $400,000. What is the gross profit percentage, and what does it indicate about the company's profitability?

Accepted Answer

40%; the company earns $0.40 of gross profit per dollar of sales.

Answer

25%; the company earns $0.25 of gross profit per dollar of sales.

Answer

60%; the company earns $0.60 of gross profit per dollar of sales.

Answer

50%; the company earns $0.50 of gross profit per dollar of sales.

A company reports net sales of \$1,000,000 and a gross profit of \$400,000. What is the gross profit percentage, and what does it indicate about the company's profitability?