There are many financial ratios, some measure business liquidity, and others measure profitability. The gross sales to equity ratio measures 1. effective use of capital 2. indicates potential financing discrepancies and 3. illustrates the relationship between equity levels and sales. There are also quite a few things this ratio doesn't do such as determine the affect of seasonal and cyclical cycle on sales, but it can generally be referred to as a performance ratio and potentially be used as a variable in sales forecasts.
Complete article link: http://www.ehow.com/info_8511852_gross-sales-equity-ratio.html
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