Cost of goods sold has increased
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The gross profit margin is unchanged, but the net profit margin declined over the same period. What could be the reason for this change?
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- Which of the following statements is correct? When cost of goods sold as a percentage of sales increases, the gross profit margin will increase. If the gross profit margin increases from one year to the next, then the net profit margin will also increase from one year to the next. If the gross profit margin is the same for the current and past year, then sales and cost of goods sold in dollars did not change. It is possible that when cost of goods sold in dollars increases, cost of goods sold as a percentage of sales decreases.Which of the following statements is true with regard to the gross profit ratio? An increase in cost of goods sold would increase the gross profit ratio (assuming sales remain constant). An increase in the gross profit ratio may indicate that a company is efficiently managing its inventory. An increase in selling expenses would lower the gross profit ratio. a.1 b.2 c.1 and 2 d.2 and 3Based on the vertical analysis attached in the screenshot, which of the following statements is correct? a. Costs other than selling expenses (cost of goods sold and administrative expenses) improved as a percentage of sales. b. Net income as a percentage of sales increased. c. The sales promotion campaign appears to have been successful. d. Selling expenses as a percent of sales increased slightly
- Steadily increasing cost of goods sold as a percentage of net revenues is an indication ofa. decreasing earnings quality.b. increasing earnings quality.c. financial statement fraud.d. increasing production efficiencies.In a period of rising prices,a. cost of goods sold under LIFO will be less than under FIFO.b. gross profit under FIFO will be higher than under LIFO.c. LIFO inventory will be greater than FIFO inventory.d. net income under LIFO will be higher than under FIFO.The equation for Net Income is "Net Income = Gross Profit - Operating Expenses." If you cut operating expenses, your Net Income would? Increase Stay the same Decrease
- Suppose the firm makes the change but its competitors react by making similar changes to their own credit terms, with the net result being that gross sales remain at the current 1,000,000 level. What would be the impact on the firms after-tax profitability?When sales volume increases, which company will experience a larger percentage increase in profit: company X, which has mostly fixed expenses, or company Y, which has mostly variable expenses?A decrease in Selling and Administrative Expenses woulddirectly impact what ratio?a. Fixed asset turnover ratio. c. Current ratio.b. Times interest earned. d. Gross profit percentage.
- What is the impact on profit for the year if income overstated? a. no effect b. profit will be overstated c. cannot be determined due to insufficient information d. profit will be understatedDuring the current year, XYZ Company increased its variable SG&A expenses while keeping fixed SG&A expenses the same. As a result, XYZ’s: a. Contribution margin and gross margin will be lower. b. Contribution margin will be higher, while its gross margin will remain the same. c. Operating income will be the same under both the financial accounting income statement and contribution income statement. d. Inventory amounts booked under the financial accounting income statement will be lower than under the contribution income statement.If a company was able to reduce its inventory level while keeping other things constant, we will see a change in which of the following accounting measures for liquidity? An increase in interval measure No change in any liquidity measure. A decrease in quick ratio An increase in cash ratio A decrease in current ratio
