Merchandise inventory: Multiple Cholce Is a long-term asset Is a current asset Includes supplies the company will use In future perlods. Is classified with Investments on the balance sheet Must be sold within one month. The gross margin ratio: Multiple Cholce Is also called the net profit ratio. Indicates the percent of sales revenue remaining after covering the cost of the goods sold. Is also called the profit margin. Is a measure of liquidity and should exceed 20 to be acceptable. Should be greater than 1 for merchandising companies