Alpha Network Solutions has had declining net income the past four years. The company president employs you as a consultant to review the company’s operations in an effort to identify the reason for the decline. As part of your i analysis, you make a component percentage analysis of the company’s four most recent income statements. A part of that analysis is shown below. What are the implications from the information? What are the problems or potential :

problems evident from this analysis? What are your suggestions to the company?

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20X4 20X3 20X2 20X1 Cost of Merchandise Sold 62.1% 58.4% 55.2% 52.5% Total Selling Expenses 12.1% 14.6% 15.7% 18.9%