Blue ace autos inc. and ferdova autos inc. are two competing automobile companies. while blue ace autos' cost of goods sold/revenue is 63.4 percent, the cost of goods sold/revenue of ferdova autos is 54.2 percent. what do you infer from this financial data?

Question

Business

Zoey Avery

29 March, 03:44

Blue ace autos inc. and ferdova autos inc. are two competing automobile companies. while blue ace autos' cost of goods sold/revenue is 63.4 percent, the cost of goods sold/revenue of ferdova autos is 54.2 percent. what do you infer from this financial data?

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Maximillian Mejia · Answer 1

Given:

Blue Ace Autos Inc: cost of goods sold / revenue = 63.4%

Ferdova Autos Inc.: cost of goods sold / revenue = 54.2%

The percentage rate represents the part of the revenue that the cost of goods sold is a part of. This means that the revenue is 100%. The difference of the revenue and cost of good sold is the profit. The higher the percentage of the profit, the better.

Blue Ace Autos Inc: 100% - 63.4% = 36.6%

Ferdova Autos Inc: 100% - 54.2% = 45.8%

Ferdova Autos Inc. earn a higher profit (45.8% of revenue) than Blue Ace Autos Inc (36.6% of revenue).