1. Consider the following financial information for an apparel retailer pursuing a low-cost strategy.

Please answer these specific questions (and be sure to explain your responses):

1. Are SG&A expenses as a percentage of sales likely to be rising or falling at this firm from 2004-2008?

b. Are sales per square foot and inventory turns likely to be rising or falling?

c. Are interest payments as a percentage of sales likely to be rising or falling?

d. What is your overall assessment of this firms recent financial performance?

2006 $2,000,000$ 2,200,000 $2,420,000 $ 2,662,000$2,928,200 $700,000$ 770,000 $ 847,000$931,700$1,024,870 $200,000$ 198,000 $ 193,600 $ 212,960$234,256 $2,000,000 $ 2,200,000 $ 2,530,000 $3,036,000$ 3,643,200 2004 2005 2007 2008 Revenue Gross Profit Net Income Total Assets Total Liabilities$1,000,000 $1,100,000 $ 1,265,000$1,821,600$2,185,920 2006 $2,000,000$ 2,200,000 $2,420,000 $ 2,662,000$2,928,200 $700,000$ 770,000 $ 847,000$931,700$1,024,870 $200,000$ 198,000 $ 193,600 $ 212,960$234,256 $2,000,000 $ 2,200,000 $ 2,530,000 $3,036,000$ 3,643,200 2004 2005 2007 2008 Revenue Gross Profit Net Income Total Assets Total Liabilities$1,000,000 $1,100,000 $ 1,265,000$1,821,600$2,185,920