The WXY company has been in business for over 40years. Sales has been consistent for the last 10 years at $2.1m annually. In addition, the Gross margin has been consistent at 60%. Costs were all consistent- Warehouse costs $250,000, Transportation $150,000, ICC, $150,000 and Other Costs $400,000 Taxes and Interest at $100,000. The Assets were: Current-$110,000, Fixed Assets $390,000 and Liabilities were Current $60,000, Long Term $430,000. Last year the company made a number of changes in the distribution of the product to their customers. This included adding a warehouse and eliminating some 3rd party warehousing.

Here is the email you received from the accountant:

Greetings,

I'm very busy with tax season but here is some information you will need: Sales this last year were $2,250,000 and COGS were $787,500. The sale of our Cincinnati warehouse increased LT assets by $100,000 to $540,000 and new warehouse costs are $328,000. The reduction mileage and delivery times to the customers decreased our transportation costs to $100,000. Inventory carrying costs grew to $170,000. Other costs to the organization grew to $440,000. Taxes and Interest were same at $100,000. I haven't had a chance to check the profit levels. Current Assets grew to $152,000 but so did Current Liabilities to $85,000. The purchase of the asset resulted in Long Term Liabilities increasing to $550,000. Anyways very busy got to go.

Saheed

You have been tasked by the owner to do an analysis of this change and determine whether or not it was successful. What ratios and margins should be considered?