Which of the Following Statements Regarding the Gross Profit Ratio

Multiple Choice

Which of the following statements regarding the gross profit ratio is not true?

A) The gross profit ratio alone is sufficient to determine a company's profitability.
B) Managers,investors,and creditors use the gross profit ratio to measure one aspect of profitability.
C) The gross profit ratio explains how many cents on every dollar are available to cover operating expenses and earn a profit.
D) If a company's net sales were $200,000 and cost of goods sold were $120,000,its gross profit ratio would be 40%.