Problem 3-7 (Algo) Profitability ratios [LO3-2]

The Haines Corporation shows the following financial data for 20X1 and 20X2:

	20X1	20X2
Sales	$ 3,220,000	$ 3,020,000
Cost of goods sold	1,600,000	2,300,000
Gross profit	$ 1,620,000	$ 720,000
Selling & administrative expense	278,000	288,000
Operating profit	$ 1,342,000	$ 432,000
Interest expense	48,600	52,700
Income before taxes	$ 1,293,400	$ 379,300
Taxes (35%)	452,690	132,755
Income after taxes	$ 840,710	$ 246,545

For each year, compute the following ratios and indicate how the change in each ratio will affect profitability in 20X2.

Note: Input your answers as a percent rounded to 2 decimal places.