Which of the Following Statements Is True

Multiple Choice

Which of the following statements is true?

A) A gross profit ratio that is declining over time indicates a reduction in the margin between the purchase price and the selling price of goods.
B) An expense to sales ratio of 20% in year 1 and 22% in year 2 indicates that management policies to control expenses are succeeding.
C) Generally speaking the slower the turnover of inventory the greater the profitability of the business.
D) The formula for the inventory turnover ratio is sales divided by average inventory.