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

General-purpose financial statements, Q. General-purpose financial statemen...

Q. General-purpose financial statements? Accountants prepare general-purpose financial statements at usual intervals to meet many of the information needs of external parties a

Show periodicity concept, Q. Show Periodicity concept? As per to the pe...

Q. Show Periodicity concept? As per to the periodicity (time periods) concept or assumption an entity's life can be meaningfully subdivided into time periods (such as months or

Meaning of invoice?, Invoice is a text which haves the under mentioned deta...

Invoice is a text which haves the under mentioned details compulsorily. 1. Invoice Number 2. Name and address of the person 3. Invoice date Name and address of someone

A firm''s __________ account is categorized as a current, A firm's ________...

A firm's __________ account is categorized as a current asset. A. equipment B. accounts payable C. bonds payable D. merchandise inventory

Assess the solvency of a business, Identify and explain the two ratios that...

Identify and explain the two ratios that are used to assess the solvency of a business.

International recommendations on how IAS 40 can be improved, I need an expe...

I need an experts advice, I''m nearly finished with my Dissertation on IAS 40 - but I need some more guidance on issues with the standard and how it can be improved

On aug 14th, On Aug 14th, One of our Partner's ( Compuville ) cash book sho...

On Aug 14th, One of our Partner's ( Compuville ) cash book showed a debit balance of $4,000.00. His bank statement showed a balance of $4,270.00. On comparison the following we

Analyzing how well the company is performing, Q. Analyzing how well the com...

Q. Analyzing how well the company is performing? The classified income statement illustrates important relationships that help in analyzing how well the company is performing.

On july 1, On July 1, 2010, Harris Co. issued 6,000 bonds at $1,000 each. T...

On July 1, 2010, Harris Co. issued 6,000 bonds at $1,000 each. The bonds paid interest semiannually at 5%. The bonds had a term of 20 years. At the time of issuance, the market r

Prepare a narrative describing the transaction cycle process, Assignment: ...

Assignment: This assignment will be to describe and document the internal controls over a transaction cycle at a local business. A transaction cycle could be the sales process,

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