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The profitability ratios so the success or the failure of some businesses. The ratios are there to express the profits made by a business so that on financial statements so that they compare how they are doing compared to other business and how they’ve done in the past.
Firstly Gross profit margin:
‘The gross profit margin relates to the gross profit of the business to the sales revenue generated for the same period. Gross profit represents the difference between sales revenue and the cost of sales. The ratio is therefore a measure of profitability in buying (or producing) and selling goods before any other expenses are taken into account...
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