The following items were taken from the financial statements of St. Johns, Inc., over a four-year period:
Nem
2018
2017
2016
2015
Net Sales
$655,000 $640,000 $575,000 $500,000
Cost of Goods Sold 520,000 480,000 435,000 400,000
Gross Profit
$135,000 $160,000 $140,000 $100,000
Explain whether the trends are favorable or unfavorable for each item.
Answer:
Item
2018
2017
2016
2015
Net Sales
655,000/500,000= 640,000/500,000= 575,000/500,000= 100%
131%
128%
115%
Cost of Goods
Sold
520,000/400,000= 480,000/400,000= 435,000/400,000= 100%
130%
120%
109%
Gross Profit
135,000/100,000= 160,000/100,000= 140,000/100,000= 100%
135%
160%
140%