Gross Profit Literature & Language Term Paper Essay (Term Paper Sample)

QantasProfitability Ratio
Profitability RatioA) Gross Profit Ratio: It is a ratio which indicates the correlation between the gross profit margin of the company and the net sales. The Gross Profit ratio is used by the financial statements users to evaluate the profitability which is true of organization sales (Solan,2019). This ratio is used in many cases for the purpose of comparison to the financial statements of the competitor’s. The higher the Gross Profit ratio, the organization has more funds for its operation.In the case of Qantas, the Gross Profit ratio of the company has increased which is a good indicator for the company. In the financial year 2017 the gross profit ratio is 8.80% which has increased to 10.73% in the financial year 2018 the company is advised to carry out its operation in the same manner.B) Profit Margin Ratio: It is also referred to as return on sales ratio or ratio of gross profit, which indicates the net income amount earned with sales of each dollar generated by comparing the company net sales and net income.