(A) Net Sales (B) Operating Expenses (C) Cost of Goods Sold (D) Operating Profit 15. 16. 17. 18. 19. 20. statement. success reduction could improve gross margin increase could improve gross margin gross sales minus customer returns and allowances provides the foundation for calculating ratios in an incrme must be lower than gross margin for the firm to have a profit often reported to external constituencies as a measure of overall