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P5-5A. Profitability Analysis Kolby Enterprises reports the following information on its income statement: LO4 Net sales. Cost of goods sold Selling expenses Required $250,000
P5-5A. Profitability Analysis Kolby Enterprises reports the following information on its income statement: LO4 Net sales. Cost of goods sold Selling expenses Required $250,000 150,000 Administrative expenses. Other income 50,000 Other expense $10,000 15,000 10.000 Calculate Kolby's gross profit percentage and return on sales ratio. Explain what each ratio tells us about Kolby's performance. Kolby is planning to add a new product and expects net sales to be $45,000 and cost of goods to be $38,000. No other income or expenses are expected to change. How will this affect Kolby's gross profit percentage and return on sales ratio? What do you advise regarding the new product offering?
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