Dollar General Corporation operates approximately 9,400 general merchandise stores that feature quality merchandise at low prices to

Question:

Dollar General operates approximately 9,400 general merchandise stores that feature quality merchandise at low prices to meet the needs of middle-, low-, and fixed-income families in southern, eastern, and mid-western states. For the year ended January 28, 2011, the company reported average inventories of $1,643 (in millions) and an inventory turnover of 5.39. Average total fixed assets were $1,427 (million), and the fixed ratio was 9.13.

Required:
1. Calculate Dollar General’s gross profit percentage (expressed as a percentage with one decimal place). What does this imply about the amount of gross profit made from each dollar of sales?

TIP: Work backward from the fixed and s to compute the amounts needed for the gross profit percentage.

2. Is this an improvement from the gross profit percentage of 31.3 percent earned during the previous year?

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio. Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...