The excerpts from the profit and loss account of MG Retails Limited for the last two years

Question:

The excerpts from the profit and loss account of MG Retails Limited for the last two years are given as follows: 

Particulars Sales Cost of goods sold Other operating expenses Depreciation Interest Profit before tax Tax

You are required to:

1. Calculate the year­on­year growth of sales and net profit.

2. The growth of profits has exceeded the growth sales. Identify the reasons by using suitable profitability and expense ratios.

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