Question

1.How much profit a business makes on each sale can be measured using:

Return on investment

Operating margin

Inventory turnover

Gross margin

2.Inventory is a use of cash.

True

False

Answer 1

  

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Answer 1)

Gross Margin = Gross Profit / Sales, here we calculate the profit per $ of sale, which is being asked in the question.

Therefore the correct answer is option 4

Answer 2)

The statement is TRUE. as Investory required to be purchased. ans then sale of inventory is the source of cash by inventory in itself is a use of cash.

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