Consider the following statements regarding profitability ratios in financial analysis: Statement 1: The Gross Profit Ratio reflects production and purchasing efficiency but fails to account for operating and financial expenses. Statement 2: The Net Profit Ratio is the most comprehensive firm-level profitability measure as it captures COGS, operating expenses, interest, and taxes. Choose the correct option:

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Both statements are true.

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Answer 1

Both statements are false.

Answer 2

Both statements are true.

Answer 3

Statement 1 is true, but Statement 2 is false.

Answer 4

Statement 1 is false, but Statement 2 is true.

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