Swank Clothiers had sales of $397,000 and cost of goods sold of $334,000. a. What is...
Swank Clothiers had sales of $397,000 and cost of goods sold of
$334,000.
a. What is the gross profit margin (ratio of gross
profit to sales)? (Do not round intermediate calculations.
Input your answer as a percent rounded to 2 decimal places.)
b. If the average firm in the clothing industry
had a gross profit of 20 percent, how is the firm doing?
Homework Answers
a)
gross profit = sales - COGS
gross profit = 397,000 - 334,000
gross profit = $63,000
Gross profit margin = (Gross profit / sales ) * 100
Gross profit margin = (63,000 / 397,000 ) * 100
Gross profit margin = 15.87%
b)
Swank Clothiers is almost close to 4% less than average firm in the clothing industry. This means that the firm is not doing very well compared to other firms. They need to bring down their COGS.
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Swank Clothiers had sales of $397,000 and cost of goods sold of
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