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 Don't use plagiarized sources. Get Your Custom Essay on how much was the gross profit margin what was the gross profit percentage ratio 555549 For $10/Page 0nly | $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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