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Gross profit is a measure of the overall profitability of a company. True False

Gross profit is a measure of the overall profitability of a company. True False

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Question:** Gross profit is a measure of the overall profitability of a company. - ○ True - ○ False **Analysis:** This statement presents a question about whether gross profit accurately reflects a company's overall profitability. Gross profit is determined by subtracting the cost of goods sold (COGS) from total revenues and primarily indicates the efficiency with which a company produces and sells goods. However, for a comprehensive view of overall profitability, including indirect costs and other expenses, net profit is a more complete measure.
Transcribed Image Text:**Question:** Gross profit is a measure of the overall profitability of a company. - ○ True - ○ False **Analysis:** This statement presents a question about whether gross profit accurately reflects a company's overall profitability. Gross profit is determined by subtracting the cost of goods sold (COGS) from total revenues and primarily indicates the efficiency with which a company produces and sells goods. However, for a comprehensive view of overall profitability, including indirect costs and other expenses, net profit is a more complete measure.
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