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QUESTION

(1) Calculate the following four indicators, "gross profit ratio",

Case 7: The Profit-loss statement and profitability (15 marks)You are provided with the following table about a retail business (in $):20182019Net sales120,000160,000Cost of goods sold80,000100,000Gross profit( )( )Operating expenses30,00032,000Net profit()( )Inventory (ending balanceEnding balanceEnding balance 52,00046,000 in 2016)50,000Required:(1) Calculate the following four indicators, "gross profit ratio", "profit margin","(operating) expenses to sales ratio", and "inventory turnover" for year 2017 andyear 2018. (10 marks)(2) Based on the ratios calculate in part a of this question, comment on theprofitability aspect of the business. (5 marks)

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