Profitability Analysis Kolby Enterprise reports the following information on its income statement: net sales 250,000, cost of goods sold 150,000, selling expenses 50,000, Administrative expenses 10,000, other income 15,000, other expense 10,000. Required Calculate Kolby's gross profit percentage and return on sales ratio. Explain what each ratio tells us about Kolby's performance. Kolby is planning to add a new product and expects net sales to be $45,000 and cost of goods to be 38,000. No other income or expand are expected to change. How will this affect Kolby's gross profit percentage and return on sales ratio? What do you advise regarding the new product offering
Profitability Analysis Kolby Enterprise reports the following information on its income statement: net sales 250,000, cost of goods sold 150,000, selling expenses 50,000, Administrative expenses 10,000, other income 15,000, other expense 10,000. Required Calculate Kolby's gross profit percentage and return on sales ratio. Explain what each ratio tells us about Kolby's performance. Kolby is planning to add a new product and expects net sales to be $45,000 and cost of goods to be 38,000. No other income or expand are expected to change. How will this affect Kolby's gross profit percentage and return on sales ratio? What do you advise regarding the new product offering
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 87PSB
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P5-5A Profitability Analysis Kolby Enterprise reports the following information on its income statement:
net sales 250,000, cost of goods sold 150,000, selling expenses 50,000, Administrative expenses 10,000, other income 15,000, other expense 10,000.
Required
Calculate Kolby's gross profit percentage and return on sales ratio. Explain what each ratio tells us about Kolby's performance. Kolby is planning to add a new product and expects net sales to be $45,000 and cost of goods to be 38,000. No other income or expand are expected to change. How will this affect Kolby's gross profit percentage and return on sales ratio? What do you advise regarding the new product offering?
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