The financial statements of The North West Company Inc. are presented in Appendix A and the financial statements for Sobeys Inc. are presented in Appendix B.

Instructions

(a) Determine the following values for each company as follows:

Percentage change in sales revenue for North West and for Sobeys for the most recent year shown. Gross profit margin.

(b) Which company had the bigger increase in sales? Was that company able to maintain its gross margin? What conclusions can be drawn from this?

(c) In spite of increasing sales, one of the companies experienced a decreased gross margin. Explain how this could occur.