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HRCI SPHR Exam - Topic 4 Question 120 Discussion

Which of the following fluctuations will result in a lower gross margin? (Select TWO options)
B) Increased cost of goods sold and D) Decreased revenue
A) Increased gross profit
C) Decreased operating expenses
E) Decreased liabilities

HRCI SPHR Exam - Topic 4 Question 120 Discussion

Actual exam question for HRCI's SPHR exam
Question #: 120
Topic #: 4
[All SPHR Questions]

Which of the following fluctuations will result in a lower gross margin? (Select TWO options)

Show Suggested Answer Hide Answer
Suggested Answer: B, D

Gross margin = (Revenue -- Cost of Goods Sold) Revenue

Higher COGS and lower revenue both reduce the margin.

Operating expenses and liabilities impact net profit, not gross margin directly.

SPHR financial literacy requires knowledge of ''how operational changes affect key financial ratios used in strategic planning and compensation modeling''.


by Vernell at Jun 19, 2026, 05:52 PM

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Hollis
3 days ago
I’m not so sure about D. What if revenue drops but costs stay low? Still B for sure.
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Augustine
8 days ago
Agreed, B and D make sense. Increased costs really impact gross margin.
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Chau
14 days ago
I think B and D are the right choices. Higher costs and lower revenue hurt margins.
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Gail
19 days ago
I thought decreased liabilities would help, not hurt!
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Norah
24 days ago
C is a good option too, but not for lower gross margin.
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Gracie
29 days ago
Wait, how does decreased revenue impact gross margin?
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Leslie
1 month ago
Totally agree, higher COGS definitely hurts margins!
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Lashaunda
1 month ago
B and D are the right choices.
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Hildegarde
1 month ago
I feel like decreased operating expenses could help gross margin, but I can't recall if it was ever mentioned in relation to this topic.
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Nidia
2 months ago
Increased gross profit seems like it would actually improve gross margin, right? I'm a bit confused about that one.
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Johna
2 months ago
I remember a practice question where decreased revenue also impacted gross margin negatively, so I might go with that.
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Anjelica
2 months ago
I think increased cost of goods sold definitely lowers gross margin, but I'm not sure about the second option.
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