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how much was the gross profit margin what was the gross profit percentage ratio 555549

Analyzing Gross Profit Percentage on the Basis of an Income Statement and Within-Industry Comparison – Wolverine World Wide Inc. prides itself as being the “world’s leading marketer of U.S. branded nonathletic footwear.” It competes in many markets with Deckers, often offering products at a lower price point. Its brands include Wolverine, Bates, Sebago, and Hush Puppies. The following data were taken from its recent annual report (dollars in thousands):

Sales of merchandise

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$1,220,568

Income taxes

44,763

Cash dividends declared on common stock

21,500

Selling and administrative expense

345,183

Cost of products sold

734,547

Interest expense

2,850

Other income

839

Items not included in above amounts:

Number of shares of common stock outstanding, 48,888

Required:

1. Based on these data, prepare an income statement (showing both gross profit and income from operations). There were no extraordinary items.

2. How much was the gross profit margin? What was the gross profit percentage ratio? Explain what these two amounts mean. Compare the gross profit percentage with that of Deckers. What do you believe accounts for the difference?

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