Problem 6.3A Trend Analysis (LO6-8)

[The following information applies to the questions displayed below.]

Shown as follows is information from the financial reports of Knauss Supermarkets for the past few years.

	Year 3				Year 2				Year 1
Net sales (in millions)	$	5,995			$	5,460			$	4,920
Number of stores		488				485				470
Square feet of selling space (in millions)		15.9				14.1				11.5
Average net sales of comparable stores (in millions)	$	12.8			$	13.2			$	13.9

Problem 6.3A Part a

Required:

a. Calculate the following statistics for Knauss Supermarkets (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to 1 decimal place (i.e .1234 to be entered as 12.3).)

a-1. The percentage change in net sales from year 1 to year 2 and year 2 to year 3. Hint: The percentage change is computed by dividing the dollar amount of the change between years by the amount of the base year. For example, the percentage change in net sales from year 1 to year 2 is computed by dividing the difference between year 1 to year 2 net sales by the amount of year 1 net sales, or ($5,460 $4,920) $4,920 = 11.0% increase.

a-2. The percentage change in net sales per square foot of selling space from year 1 to year 2 and year 2 to year 3.

a-3. The percentage change in comparable store sales from year 1 to year 2 and year 2 to year 3.

b. Evaluate the sales performance of Knauss Supermarkets. (Select all that apply.)

Check All That Apply

• Knauss Supermarkets has performed well as revenue from sales has increased and hence there is no need to revisit its marketing strategies.

• Knauss Supermarkets has not performed well even though revenue from sales has increase and hence it has to revisit its marketing strategies.

• Knauss Supermarkets has performed same as last year and hence there is no need to revisit its marketing strategies.