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

What is net realizable value, Q. What is Net realizable value? Companie...

Q. What is Net realizable value? Companies must not carry goods in inventory at more than their net realizable value. Net realizable value is the approximate selling price of a

Meaning of social accounting, Question Social accounting is a way of ca...

Question Social accounting is a way of calculating and reporting on an organisation's ethical and social performance. It is principally concerned with offering a complementary

Imprest system, at the end of May he has a voucher for expenditure of $270 ...

at the end of May he has a voucher for expenditure of $270 and a balance in hand of $30. explain what the imprest amount is

What is classified balance sheet, Q. What is classified balance sheet? ...

Q. What is classified balance sheet? The balance sheets we presented thus far have been unclassified balance sheets. An unclassified balance sheet has three major categories li

Different depreciation methods, Different Methods Of depreciation Dimini...

Different Methods Of depreciation Diminishing Value Method Straight Line Method Annuity Method Depletion Method Written Down value Method

Describe the cost of sales, Q. Describe the Cost of sales? Cost of sale...

Q. Describe the Cost of sales? Cost of sales, cost of goods sold -- expense or cost of all items sold during an accountingperiod. Every unit sold has a cost of sales or cost of

Nature and purpose of closing entries, Closing Entries based accounting que...

Closing Entries based accounting question a)  Describe the nature of Closing Entries.  I.e. what is the purpose of closing entries?                     b)  For each of the f

Management, briefly explain management process

briefly explain management process

What is the typical time span for long-range plans?, What is the typical ti...

What is the typical time span for long-range plans? A. More than 1 year C. 3-5 years B. 2-3 years D. About 25 years

Assets, paid rent $200 by cash

paid rent $200 by cash

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