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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.
Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
The gross profit should be sufficient to cover all operating expenses and to build up reserves after paying all fixed interest charges and dividends.
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Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.
Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.
The correct answer is option 'A', which states that both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A). Let's break down the explanation for better understanding:
Explanation:
The Gross Profit ratio is an important financial ratio that indicates the profitability of a business. It is calculated by dividing the gross profit (sales minus the cost of goods sold) by the net sales and multiplying by 100. The higher the gross profit ratio, the better it is for the business, while a lower ratio is not good for the business.
Importance of Gross Profit Ratio:
The Gross Profit ratio reflects the efficiency with which a firm produces its products. It indicates how well the organization is able to control its production costs and generate profit from its operations. A high gross profit ratio suggests that the business is able to produce its goods or services at a relatively lower cost compared to its competitors. This can be achieved through effective cost management, efficient production processes, and economies of scale.
Benefits of a Higher Gross Profit Ratio:
1. Increased Profitability: A higher gross profit ratio indicates that the business is generating more profit from its operations. This can lead to increased overall profitability.
2. Competitive Advantage: A lower cost of production allows the business to offer its products or services at a competitive price, giving it an advantage over competitors.
3. Financial Stability: Higher profits provide the business with more financial stability and resources for growth, investment, and expansion.
Reason (R) Explanation:
The Reason (R) provided in the statement correctly explains why a higher gross profit ratio is good for the business. A high gross profit ratio indicates that the organization is able to produce its products at a relatively lower cost. This reflects efficiency in production processes, effective cost management, and the ability to take advantage of economies of scale. As a result, the business is able to generate higher profits and maintain a competitive edge in the market.
In conclusion, a higher gross profit ratio is indeed good for the business as it reflects efficiency in production and allows for increased profitability and competitiveness. The Reason (R) provided correctly explains the relationship between a high gross profit ratio and the organization's ability to produce at a relatively lower cost.
Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.
The correct answer is option 'A', which states that both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A). Let's break down the explanation for better understanding:
Explanation:
The Gross Profit ratio is an important financial ratio that indicates the profitability of a business. It is calculated by dividing the gross profit (sales minus the cost of goods sold) by the net sales and multiplying by 100. The higher the gross profit ratio, the better it is for the business, while a lower ratio is not good for the business.
Importance of Gross Profit Ratio:
The Gross Profit ratio reflects the efficiency with which a firm produces its products. It indicates how well the organization is able to control its production costs and generate profit from its operations. A high gross profit ratio suggests that the business is able to produce its goods or services at a relatively lower cost compared to its competitors. This can be achieved through effective cost management, efficient production processes, and economies of scale.
Benefits of a Higher Gross Profit Ratio:
1. Increased Profitability: A higher gross profit ratio indicates that the business is generating more profit from its operations. This can lead to increased overall profitability.
2. Competitive Advantage: A lower cost of production allows the business to offer its products or services at a competitive price, giving it an advantage over competitors.
3. Financial Stability: Higher profits provide the business with more financial stability and resources for growth, investment, and expansion.
Reason (R) Explanation:
The Reason (R) provided in the statement correctly explains why a higher gross profit ratio is good for the business. A high gross profit ratio indicates that the organization is able to produce its products at a relatively lower cost. This reflects efficiency in production processes, effective cost management, and the ability to take advantage of economies of scale. As a result, the business is able to generate higher profits and maintain a competitive edge in the market.
In conclusion, a higher gross profit ratio is indeed good for the business as it reflects efficiency in production and allows for increased profitability and competitiveness. The Reason (R) provided correctly explains the relationship between a high gross profit ratio and the organization's ability to produce at a relatively lower cost.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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