Refer to the financial statements of Express, Inc. in Appendix C at the end of the book. The dollars are in thousands in the requirements; show your answers in thousands of dollars.

Required:

1. What is the company’s revenue recognition policy? Look in the notes to the financial statements.

2. Assuming that $50,000 of cost of goods sold was due to noninventory purchase expenses (distribution and occupancy costs), how much inventory did the company buy during the year? Use a T-account of inventory to infer how much was purchased.

3. Calculate selling, general, and administrative expenses as a percentage of sales for each year presented. Are these expenses increasing or decreasing over time compared to sales revenue?

4. By what percent did selling, general, and administrative expenses increase or decrease from fiscal years 2017 and 2016 and between fiscal years 2015 and 2016? Percentage Change = [Current Year Amount − Prior Year Amount] ÷ Prior Year Amount. Round your percentage to one decimal place.)

5. Compute the company’s net profit margin percentage for each year presented and explain its meaning. Round your percentage to two decimal places.