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Analysis of Financial Statements — Book Keeping & Accountancy STD 12 Commerce / Arts — Question

Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsBook Keeping & AccountancyAnalysis of Financial Statements2 Marks
Question
Gross profit depends upon net sales.
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Answer

This statement is True.
The gross profit ratio discloses the relation between gross profit and total net sales. The gross profit ratio is an income-based ratio, where gross profit is an income. There is a direct relation between net sales and gross profit. Higher the net sales higher the gross profit.

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