Myer shares slumped when the department store posted a 23.1 per cent slide in profit for the first half of the 2014/2015 year. Myer’s profit was mostly hit by a 24-basis-point fall in gross profit margin and a 6.2 per cent increase in the cash cost of doing business. Myer’s capital expenditure increased almost 36 per cent due to investment in new stores and refurbishment, ongoing investment in its website and other initiatives.

a. Explain how capital expenditure can contribute to the drop in after-tax profit.
b. Discuss the reasons for a gross profit margin decreasing and the cash cost of doing business increasing.
c. Discuss if Myer’s profit performance improved in the second half of the year.