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Ratio Analysis The following information was taken from Division Manufacturings December 31st trial balances for this year and the previous year. This Year Previous Year
Ratio Analysis
The following information was taken from Division Manufacturings December 31st trial balances for this year and the previous year.
This Year | Previous Year | |||
Accounts receivable | $14,000 | $17,000 | ||
Accounts payable | 22,000 | 15,000 | ||
Cost of goods sold | 158,000 | 124,000 | ||
Sales | 346,000 | 239,000 | ||
Sales returns | 17,000 | 10,000 | ||
Retained earnings | 32,000 | 16,000 | ||
Dividends declared and paid | 3,000 | 2,000 | ||
Operating income | 25,000 | 18,000 | ||
Net income | 19,000 | 18,000 |
Required:
1. Calculate the gross profit margin and operating margin percentage for this year. Round your answers to two decimal places.
This Year | |
Gross profit margin percentage | fill in the blank % |
Operating margin percentage | fill in the blank % |
2. Assuming that all of the operating expenses are fixed (or, wont change as sales increase or decrease), what will be the operating margin percentage if net sales increase by 30%? Round your answer to two decimal places.
Operating margin percentage | fill in the blank % |
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