Gross profit/gross profit margin percentages are considered key operating information by many companies. What types of...
Gross profit/gross profit margin percentages are considered key operating information by many companies. What types of companies are most likely to closely monitor these percentages when analyzing company performance and making operational decisions? Why are they considered key to successful operations?
Homework Answers
Manufacturing and trading companies are most likely to closely monitor gross profit/gross profit margin percentages.
The ratio is expressed as a percentage and indicates the margin received on sale of goods, that is the % of money left over from revenues after covering the cost of goods sold.
The % so obtained can be used to judge profitability of the goods when they are compared with those of similar firms in the same industry.
Further, for the same firm, the trend of this ratio over the years, can indicate the improvement or deterioration in the profitability of the products.
The feature of this ratio, is that it can be calculated for the firm as a whole or for different segments or for different products. This will help in analyzing the profitability of a firm in detail.
Deterioration in this ratio can be used in decision making as to drop a segment or product.
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Gross profit/gross profit margin percentages are considered key
operating information by many companies. What types of...
Calculate gross profit margin (gross profit/revenues) and operating profit margin (operating profit/revenues) for Callaway Golf Company...
Calculate gross profit margin (gross profit/revenues) and
operating profit margin (operating profit/revenues) for Callaway
Golf Company (refer to Exhibit 2.9).
Multiple Choice
44.2% and 5.1%
50.2% and 5.1%
Cannot be calculated with the information provided
44.2% and 8.3%
EXHIBIT 2.9 CALLAWAY GOLF COMPANY Consolidated Statements of Operations (In thousands, except per share data) Year Ended December 31, 2016 2015 2014 $ 871,192 486,181 385,011 235,556 71,969 33,318 340,843 44,168 621 (2,368) 17,662 (1,690) 58,393 (132,561) 190,954 1,054 $ 189,900 $843,794...
Calculate gross profit margin (gross profitirevenues) and operating profit margin (operating profit/revenues) for Callaway Golf Company...
Calculate gross profit margin (gross profitirevenues) and operating profit margin (operating profit/revenues) for Callaway Golf Company tceferto Exhibit 2.9) Muitiple Cholce 44.2% end 57% 50.2% and 5 Cannot be calculeted with the information provided 44.2% end 8% EXHIBIT 2.9 CALLAWAY GOLF COMPANY Consolidated Statements of Operations (In thousands, except per share data) Year Ended December 31, 2014 2015 2016 $886,945 $ 871,192 $843,794 Net sales... 529,019 486,161 486,181 Cost of sales 357,926 357,633 385,011 Gross profit. Selling expenses.. General and...
(b) Analyze the changes in gross profit margin for all three years. gluss prunt margin for...
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Refer to the income statement presented in exhibit 2.10 Südzucker AG. Calculate gross profit margin (gross...
Refer to the income statement presented in exhibit 2.10
Südzucker AG.
Calculate gross profit margin (gross profit/sales),
operating profit margin (operating profit/sales), and net profit
margin (net earnings/sales) for this company. If a particular ratio
cannot be calculated, explain why not.
EXHIBIT 2.10 SÜDZUCKER AG Statement of Comprehensive Income 1 March 2016 to 28 February 2017 € million Notes 2016/17 2015/16 Revenues (6) 6,476.0 6,387.0 Change in work in progress and finished goods inventories and internal costs capitalized 141.1 -...
Analyze the changes in gross profit margin for all three years. il unee i turee year...
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Calculate the Gross Profit Margin using the information provided. What is the GPM for Apple? (7.5...
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the dropdown option for the first question: net profit margin OR operating profit margin // debt...
the
dropdown option for the first question: net profit margin OR
operating profit margin // debt ratio OR equity multiplier.
the dropdown option for the second question: shareholder and
dividend management OR use of debt versus equity financing //
management of its revenues and depreciation methods OR control over
its expenses
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Analyze the various operating expenses as percentages of gross profit for Jamba Juice in the last five years. Should Jam...
Analyze the various operating expenses as percentages of gross
profit for Jamba Juice in the last five years. Should Jamba Juice
try to increase the price of its products? What operating expenses
are hurting Jamba Juice the most? Suggest possible turnaround
actions the company should take.
JAMBA, INC. CONSOLIDATED BALANCE SHEETS December 29, 2016 7,099 55,997 December 29, 2015 8,990 64,625 December 30, 2011 9,544 75.744 (Dollars in thousands, except share and per share amounts) Deterred rent and other long-term...
UNCLUT I LULL 12. Return on common equity 13. Gross profit margin Note: For ratios that...
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Calculate gross profit margin (gross profit/revenues) and
operating profit margin (operating profit/revenues) for Callaway
Golf Company (refer to Exhibit 2.9).
Multiple Choice
44.2% and 5.1%
50.2% and 5.1%
Cannot be calculated with the information provided
44.2% and 8.3%
EXHIBIT 2.9 CALLAWAY GOLF COMPANY Consolidated Statements of Operations (In thousands, except per share data) Year Ended December 31, 2016 2015 2014 $ 871,192 486,181 385,011 235,556 71,969 33,318 340,843 44,168 621 (2,368) 17,662 (1,690) 58,393 (132,561) 190,954 1,054 $ 189,900 $843,794...
Calculate gross profit margin (gross profitirevenues) and operating profit margin (operating profit/revenues) for Callaway Golf Company tceferto Exhibit 2.9) Muitiple Cholce 44.2% end 57% 50.2% and 5 Cannot be calculeted with the information provided 44.2% end 8% EXHIBIT 2.9 CALLAWAY GOLF COMPANY Consolidated Statements of Operations (In thousands, except per share data) Year Ended December 31, 2014 2015 2016 $886,945 $ 871,192 $843,794 Net sales... 529,019 486,161 486,181 Cost of sales 357,926 357,633 385,011 Gross profit. Selling expenses.. General and...
(b) Analyze the changes in gross profit margin for all three years. gluss prunt margin for LA Theatres Inc. for all three years. 3.15. Writing Skills Problem Income statements are presented for the Elf Corporation for the years ending December 31, 2016, 2015, and 2014. Elf Corporation Income Statements for the Years Ending December 31, 2016, 2015, and 2014 (in millions) Sales Cost of goods sold Gross profit Operating expenses 2016 2015 2014 $700 350 $350 $650 325 $325 $550...
Refer to the income statement presented in exhibit 2.10
Südzucker AG.
Calculate gross profit margin (gross profit/sales),
operating profit margin (operating profit/sales), and net profit
margin (net earnings/sales) for this company. If a particular ratio
cannot be calculated, explain why not.
EXHIBIT 2.10 SÜDZUCKER AG Statement of Comprehensive Income 1 March 2016 to 28 February 2017 € million Notes 2016/17 2015/16 Revenues (6) 6,476.0 6,387.0 Change in work in progress and finished goods inventories and internal costs capitalized 141.1 -...
Analyze the changes in gross profit margin for all three years. il unee i turee year years. 3.15. Writing Skills Problem Income statements are presented for the Elf Corporation for the years ending December 31, 2016, 2015, and 2014. Elf Corporation Income Statements for the Years Ending December 31, 2016, 2015, and 2014 (in millions) Sales Cost of goods sold Gross profit Operating expenses: 2016 2014 $700 350 $650 325 5350 $325 275 $550 275 Administrative 100 50 $200 70...
the
dropdown option for the first question: net profit margin OR
operating profit margin // debt ratio OR equity multiplier.
the dropdown option for the second question: shareholder and
dividend management OR use of debt versus equity financing //
management of its revenues and depreciation methods OR control over
its expenses
9. An analysis of company performance using DuPont analysis A sheaf of papers in his hand, your friend and colleague, Jason, steps into your office and asked the following...
Analyze the various operating expenses as percentages of gross
profit for Jamba Juice in the last five years. Should Jamba Juice
try to increase the price of its products? What operating expenses
are hurting Jamba Juice the most? Suggest possible turnaround
actions the company should take.
JAMBA, INC. CONSOLIDATED BALANCE SHEETS December 29, 2016 7,099 55,997 December 29, 2015 8,990 64,625 December 30, 2011 9,544 75.744 (Dollars in thousands, except share and per share amounts) Deterred rent and other long-term...
UNCLUT I LULL 12. Return on common equity 13. Gross profit margin Note: For ratios that call for using average balance sheet figures, compute the rates average balance sheet figures and year-end balance sheet figures. b. Briefly comment on profitability and trends indicated in profitability. Also commento difference in results between using the average balance sheet figures and year end figures P 8-13 Required Answer the following multiple-choice questions: a. Which of the following is not considered to be a...
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