Choose and identify three profitability ratios found in the background materials or from other sources. Show the computation of the three ratios. A General Example Not Using ABC Company data.` Last year, EFG Corporation had net sales of $800,000 and its cost of goods sold was $600,000. As a result, EFG's 's gross profit was $200,000. Gross margin = gross profit / sales Gross margin = $200,000 / $800,000 Gross margin = 0.25 or 25% EFG's gross margin equals 25%. 

What does this tell us? 

What are some of the factors considered in evaluating this percentage?