Management Accounting

Gross Profit Ratio (GP Ratio)

Definition of gross profit ratio: Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the relationship between gross profit and sales. Components: The basic components for the calculation of gross profit ratio are gross profit and net sales.Net sales means that sales minus sales returns. Gross profit would be the difference betweennet sales and cost of

Constraint Definition

Constraint Definition: A constraint is anything that prevents an organization or individual from getting more of what it wants. Or a limitation under which a company must operate, such as limited machine time available or limited raw materials available that restricts the company’s ability

Gross Profit Analysis (GP Analysis)

Gross Profit Analysis (GP Analysis): After studying this chapter you should be able to: Gross profit is the difference between the cost of goods sold and sales. Since the adherence of the actual to the budgeted or standard gross profit figure is highly desirable, a careful analysis of unexpected

Conceptual Skills Definition

Conceptual Skills Definition: Conceptual Skills are the skills managers must have to think and to conceptualize about abstract and complex situations. Using these skills, managers must be able to see the organization as a whole, understand the relationships among various subunits, and visualize how

Net Profit Ratio (NP Ratio)

Definition of net profit ratio: Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage. Components of net profit ratio: The two basic components of the net profit ratio are the net profit and sales. The net profits are obtained
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