Florida General Contractor Practice Exam 2026 - Free Contractor License Practice Questions and Study Guide

Question: 1 / 400

What is the gross profit to sales ratio for a company with gross profits of 157,355 and sales of 629,420?

24.98%

15.79%

To determine the gross profit to sales ratio, you divide the gross profit by the sales, and then multiply the result by 100 to convert it into a percentage. In this case, you have a gross profit of 157,355 and sales of 629,420.

The formula for calculating the gross profit to sales ratio is:

(Gross Profit / Sales) x 100

Substituting in the values:

(157,355 / 629,420) x 100 = 0.2498 x 100 = 24.98%

This calculation shows that 24.98% of the sales revenue contributes to gross profit, which indicates a relatively healthy profitability margin.

The selected answer of 15.79% does not capture the correct ratio based on the computation, as the correct gross profit to sales ratio is 24.98%. Understanding how to calculate this ratio is crucial for assessing a company's profitability and managing financial health in construction projects or other ventures. Knowing the correct percentage allows contractors to evaluate and strategize their pricing and expense management effectively.

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18.99%

20.15%

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