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Selected financial data for Quick Sell, Inc., a retail store, appear as follows. Sales (all on account) Cost of goods sold Av

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a-1) Calculation of gross profit percentage:
Gross profit percentage= gross profit/sales*100
Year 1
Gross profit= sales- cost of goods sold
Gross profit= 603000-395000= $ 208,000
Gross profit percentage= 208000/603000*100= 34%
Year 2
Gross profit= 788000-450000= $ 338,000
Gross profit percentage= $338,000/$788,000*100= 43%
a-2)Calculation of Inventory turnover:
inventory turnover= cost of goods sold/ Average account inventory
Year 1
inventory turnover= $395000/134000= $ 2.95
Year 2
inventory turnover= $450000/$144000= $ 3.13
a-3)Calculation of Receivables turnover:
Receivables turnover= Net sales/ Average account receivables
Year 1
Receivables turnover= $ 603000/100000= $ 6.03
Year 2
Receivables turnover= $788,000/$150000= $5.25
b) Gross profit percentage and inventory turnover shows a positive trend.
Receivable turnover show negative trend.
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