(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To state: An increase in the gross profit percentage will have a favorable or unfavorable impact.

Question

Want to see the full answer?

Answer 1

Question

Chapter 13, Problem 10Q

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

To determine

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

To determine

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

To determine

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

To determine

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

For each of the following situations, indicate whether FIFO, LIFO, or weighted average applies: a. In a period of falling prices, net income would be highest. b. In a period of falling prices, the unit cost of goods would be the same for ending inventory and cost of goods sold. c. In a period of rising prices, net income would be highest. d. In a period of rising prices, cost of goods sold would be highest. e. In a period of rising prices, ending inventory would be highest.

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.

When is the forecasted growth rate in residual operating income the same as the forecasted growth rate in sales? Kindly answer the question with introduction and conclusion based on the concept of the question. Explain the answer properly considering the accounting aspect of it.

Answer 2

Question

Chapter 13, Problem 10Q

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

To determine

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

To determine

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

To determine

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

To determine

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 13, Problem 10Q

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

To determine

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

To determine

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

To determine

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

To determine

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 13, Problem 10Q

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

To determine

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

To determine

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

To determine

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

To determine

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 13, Problem 10Q

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

To determine

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

To determine

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

To determine

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

To determine

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.

Answer 6

Chapter 13, Problem 10Q

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

Answer 7

Chapter 13, Problem 10Q

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

Answer 8

To determine

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

Answer 9

To determine

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

Answer 10

To determine

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

Answer 11

To determine

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

Answer 12

To determine

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

Answer 13

To determine

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

Answer 14

To determine

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.

Answer 15

To determine

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 19

Ch. 13 - Prob. 1Q Ch. 13 - Prob. 2Q Ch. 13 - What is ratio analysis? Why is it useful? Ch. 13 - What benchmarks are commonly used for interpreting...Ch. 13 - Prob. 5Q Ch. 13 - Why are some analyses called horizontal and others...Ch. 13 - Slow Cellar’s current ratio increased from 1.2 to...Ch. 13 - From last year to this year. Colossal Company’s...Ch. 13 - From last year to this year, Berry Barn reported...Ch. 13 - Prob. 10Q

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To state: An increase in the gross profit percentage will have a favorable or unfavorable impact.

Solution Summary: The author explains gross profit percentage, inventory turnover ratio, earnings per share, and net profit margin.

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.

Want to see the full answer?

Chapter 13 Solutions

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To state: An increase in the gross profit percentage will have a favorable or unfavorable impact.

Solution Summary: The author explains gross profit percentage, inventory turnover ratio, earnings per share, and net profit margin.

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To state: An increase in the gross profit percentage will have a favorable or unfavorable impact.

(b) Introduction: Inventory turnover ratio measures the number of times a company has sold its inventory. To state: Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

(c) Introduction: Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability. To state: Increase in earnings per share will have a favorable or unfavorable impact.

(d) Introduction: Days to collect are the average number of days in which a company collects its accounts receivables in a year. To state: Decrease in days to collect will have a favorable or unfavorable impact.

(e) Introduction: Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue. To state: Increase in net profit margin will have a favorable or unfavorable impact.

Want to see the full answer?

Chapter 13 Solutions

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

An increase in the gross profit percentage will have a favorable or unfavorable impact.

(b)

Introduction:

Inventory turnover ratio measures the number of times a company has sold its inventory.

To state:

Decrease in the inventory turnover ratio will have a favorable or unfavorable impact.

(c)

Introduction:

Earnings per share (EPS) is profit of the company which is divided by common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

Increase in earnings per share will have a favorable or unfavorable impact.

(d)

Introduction:

Days to collect are the average number of days in which a company collects its accounts receivables in a year.

To state:

Decrease in days to collect will have a favorable or unfavorable impact.

(e)

Introduction:

Net profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To state:

Increase in net profit margin will have a favorable or unfavorable impact.