The following information is taken from the financial statements of Down Home Deli for the last three years. The owner, John Walton is quite pleased to see that his sales are growing steadily. 2018 2017 2016 Sales $ 61,500 $ 50,400 $ 42,000 Cost of goods sold 27,670 21,170 16,800 Operating income 7,530 6,050 4,620 Net income 3,075 4,030 2,940 Instructions: (a) Calculate gross profit margin, profit margin, and profit margin using operating income. (b) Comment on whether the Deli is, in fact, doing better over the three years as John believes.

The following information is taken from the financial statements of Down Home Deli for the last three years. The owner, John Walton is quite pleased to see that his sales are growing steadily. 2018 2017 2016 Sales $ 61,500 $ 50,400 $ 42,000 Cost of goods sold 27,670 21,170 16,800 Operating income 7,530 6,050 4,620 Net income 3,075 4,030 2,940 Instructions: (a) Calculate gross profit margin, profit margin, and profit margin using operating income. (b) Comment on whether the Deli is, in fact, doing better over the three years as John believes.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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