The gross profit to net profit ratio, also known as the ratio of gross profit to net profit, is a measure of the company's conversion efficiency from gross profit to final net profit. The higher the ratio, the higher the company's profitability after deducting period expenses (such as sales expenses, administrative expenses, research and development expenses, etc.) and taxes, which reflects the company's good profit quality and cost control ability. A higher gross profit to net profit ratio often indicates the company's potential for future profit growth, because it means that the company has the ability to retain more profits outside of expenses and taxes. At the same time, this ratio also reveals the efficiency of the company's cost control and tax planning in the operation process, so it has reference value in fundamental quantitative analysis. It should be noted that this ratio is affected by industry characteristics, business models and accounting policies, and should be used with caution when comparing across industries.