Calculate the gross margin percentage, Accounting Basics

Assignment Help:

Q. Calculate the gross margin percentage?

Calculate the gross margin percentage by using the following formula

Grossmargin percentage = Grossmargin/Net sales

To show the use of this ratio considers the following information from the 2000 Annual Report of Abercrombie & Fitch.

($ millions)                              2000                                        1999                            1998

Revenues                                 $ 1,238.6                            $ 1,030.9                          $ 805.2

Gross profit                             509.4                                       450.4                          331.4

Gross profit (margin)

Percentage   $509.5/$1,238.6 = 41.13%   $450.4/$1,030.9=43.69%      $331.4/$805.2= 1.16%

Abercrombie's gross margin held at a relatively high 41-43 percent over those three years. You must now understand the distinction between accounting for a service company and a merchandising company. The next section persist the discussion of merchandise inventory carried by merchandising companies.


Related Discussions:- Calculate the gross margin percentage

Accounting principles, Accounting Principles are the rules and guidelines t...

Accounting Principles are the rules and guidelines that companies should follow when reporting and accounting financial data. The general set of accounting principles are the gener

Create job cost summary sheet , Question: Artarmon Ltd uses a job-order...

Question: Artarmon Ltd uses a job-order costing system and a predetermined overhead rate based on direct labour cost. Estimated manufacturing overheads for the coming year were

Define the product costs, Q. Define the Product costs? Product costs ar...

Q. Define the Product costs? Product costs are costs earns in the acquisition or manufacture of goods. Since you will see in the next section included as product costs for purc

Explain statement of retained earnings, Q. Explain Statement of retained ea...

Q. Explain Statement of retained earnings? The statement of retained earnings demonstrates the change in retained earnings between the beginning and end of a period e.g. a mont

What is journal, Q. What is journal? In explaining the rules of credit ...

Q. What is journal? In explaining the rules of credit and debit we recorded transactions directly in the accounts. Every ledger (general ledger) account shows only the increase

Taking a physical inventory in periodic inventory procedure, Q. Taking a ph...

Q. Taking a physical inventory in periodic inventory procedure? Taking a physical inventory in periodic inventory Procedure Company personnel determine ending inventory cost by

Example on closing process, Q. Example on closing process? This problem...

Q. Example on closing process? This problem engross using a work sheet for Green Hills Riding Stable Incorporated for the month ended 2010 July 31 and performing the closing pr

Accounting , Jim owns and manages a small business, which provides an offic...

Jim owns and manages a small business, which provides an office design service, as well as buying and selling office furniture. Jim is a sole trader who manages all aspects of the

Adjusting entries. you have been retained to examine, Adjusting entries. Yo...

Adjusting entries. You have been retained to examine the records of Kathy's Day Care Center as of December 31, 20X3, the close of the current reporting period. In the course o

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd