Keep in mind the following: Your grade for this assignment will be based not onl
ID: 1170834 • Letter: K
Question
Keep in mind the following: Your grade for this assignment will be based not only upon getting correct answers, but also upon how well you demonstrate the depth and breadth of your knowledge and understanding of the material. A discussion of the material, not one or two word answers, is what is expected and upon what you will be graded. 2016 (current year)2015 (prior year) %of %of |Sales | $ |Sales |% change 072585 $ Net sales Cost of Goods Sold 51402174824, 21010605806% Gross Profit Advertising General & Administrative Total Operating Exp 988545 139.1 144.6% 116.3% 094737117.6%) 5061980 194% 181822 8067331 12.9% 4162408(16.0%) 448988717 93.8% 120.2% 7.2% Income from Operations nterest Income Gain on Marketable ecurities nterest Expense Total Other 1061914 1 572093 2.2% 85.6% 17977 0 16237 0.1% 10.7% 0.0% 41962 0.2% -100.0% 3184 0.0% -24.6 15577 0 5501 Before Taxes 1077491 1 1.75 627108 2.4%| 71.8% 536143(0.9% 161000 0.6% 233.0 541348 0 et Income 466108 1 16.1% Answer the following questions in your evaluation: 1. What was the percentage increase in sales from 2015 to 2016? 2. What impact did the new sales have on the gross profit? 3. Were the new sales more or less profitable sales based upon their impact on the gross profit? 4, what happened to the advertising expenses ($ & %)? 5. Is the change in advertising likely to be long term2 Why? 6. What impact did the new sales have on G&A; (General & Administrative)? Why? 7.Are total operating expenses up or down as a percentage? 8. What impact does the change in operating expenses have on the bottom line? 9. Is income from operations up or down$ & %)? 10. Is total other a significant dollar amount? Percentage increase? 11. Look at the amount of taxes paid. Why is the change so significant 12. Compare the increases in sales to the increase in profit after taxes. Was it worth it from an operations point of view? From the stockholders point of view?
Explanation / Answer
1)
Percentage increase in sales = ( 62349545 - 26072585) / 26072585 = 139.1%
2)
Impact of new sales in percentage terms = (10947371 / 62349545) * 100 = 17.6%
3)
New sales looks less profitable as gross profit margin decreased from 19.4% to 17.6%.
4)
Advertising expense increased to 455.2%.
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