University : Edith Cowan University
Course Title : ACC2250
Uploaded by : Mark polee
Profitability refers to a scenario wherein company’s profits i.e. excess of its income over expense is measured while solvency refers to its ability to pay off its debts
Company’s profitability can be estimated by below ratios:-
Gross Profit Ration = Gross Profit/Sales
=284589/291403
=97.7%
97.7% is very healthy gross profit ration, however, most of the goods sold were part of inventory.
Net Profit Ratio = Net Profit/Sales
=135505/291403
=46.5%
46.5% net profit ratio is very sound further actual cost of goods sold can be derived post deriving of co....