Which measure indicates the percentage of each sales dollar remaining after paying for goods?

Prepare for the Peregrine Foundations of Business Finance Test with detailed explanations and multiple choice questions. Get ready to excel in your exam!

The measure that indicates the percentage of each sales dollar remaining after paying for goods is the gross profit margin. This metric specifically reflects how much money is left from sales revenue after accounting for the cost of goods sold (COGS). It is calculated by taking sales revenue minus the cost of goods sold, and then dividing that amount by sales revenue. The resulting figure is then expressed as a percentage.

Gross profit margin is important because it provides insights into a company's production efficiency and pricing strategy. A higher gross profit margin suggests that the company retains more profit on each dollar of sales after covering the direct costs associated with producing its products. This measure is crucial for evaluating how well a company can manage its production costs relative to its sales figures.

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