Gross profit is the profit an organization makes in the wake of deducting the expenses related with making and selling its items, or the expenses related with giving its administrations. Gross profit will show up on an organization’s pay explanation and can be determined by subtracting the expense of merchandise sold. The inventory turnover ratio is a proficiency ratio that indicates how viably inventory is overseen by contrasting expense of products sold and normal inventory for a period. This estimates how often normal inventory is "turned" or sold amid a period. To compute: Compute the gross profit (rounded to one decimal place) and inventory turnover (rounded to two decimal places) ratios for 2016. What do these ratios tell you?

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Chapter 6, Problem 80.4C

To determine

Gross profit is the profit an organization makes in the wake of deducting the expenses related with making and selling its items, or the expenses related with giving its administrations. Gross profit will show up on an organization’s pay explanation and can be determined by subtracting the expense of merchandise sold.

The inventory turnover ratio is a proficiency ratio that indicates how viably inventory is overseen by contrasting expense of products sold and normal inventory for a period. This estimates how often normal inventory is "turned" or sold amid a period.

To compute:

Compute the gross profit (rounded to one decimal place) and inventory turnover (rounded to two decimal places) ratios for 2016. What do these ratios tell you?

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