Question

n ga bex C13: Measuring & Eval Pert Help Save & Exit S E13-10 Inferring Financial Information from Profitability and Liquidity Ratios (LO4, LO5) 16 Loonie Corporation stores feature quality merchandise at low prices to meet the needs of middle, low, and fixed income families. For the year ended January 30, 2014, the company reported average inventories of $1,332 in millions) and an inventory turnover of 5.27. Average total fixed assets were $1.252 million, and the fixed asset turnover ratio was 802 Required: 1-o. Calculate Loonie's gross profit percentage. (TIP: Work backward from the fixed asset turnover and inventory turnover ratios to compute the amounts needed for the gross profit percentage.) Round your answer to 1 decimal place.) Gross prott < Prev 16 of 18 Next > O Type here to search acer 4 5 6 W ERTY S D F G H J K

Answer 1

Cost of goods sold = Average inventory*Inventory turnover = 1332*5.27 =	$         7,019.64
Sales = Average fixed assets*Fixed asset turnover = 1252*8.02 =	$      10,041.04
Gross profit percentage = (Sales-COGS)/Sales = (10041.04-7019.64)/10041.04 =	30.1%