ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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CONTRIBUTION/SALES RATIO Definition
CONTRIBUTION/SALES RATIO (C/S RATIO) is a tool used in profit management. It is important to establish the C/S RATIO: C/S ratio = (Sales revenue - Variable cost of sales)/Sales revenue x 100. If a company achieves a high average marginal profit ratio of say, 40%, it does not mean that it will achieve high profits. The eventual profit will be dependent on the level of fixed costs within the organization.
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EXPLANATORY, in accounting, is a paragraph added to an audit report to explain something, such as the reason for a qualified or adverse opinion.
DOUBLE RULE is a double line drawn under an amount when the amounts above are totals and no other entries will be made.
