Question

Assume you are the vice president of operations for HG Lang and you are preparing for a meeting to discuss the 2012 financial results with Adrienne Aiello, the company president.
HG Lang Designs operates an exclusive bridal boutique in Manhattan. All gowns are designed by Lang but are manufactured by various small firms in France and Italy. The following financial information for the company relates.


HG Lang Designs
Income Statements


Required
a. Prepare a vertical analysis of the income statements for 2011 and 2012.Based on this analysis, what is Adrienne Aiello likely to focus on in your upcoming meeting?
b. During 2012, the company had price increases from its European gown manufacturers. Adrienne Aiello has asked you to estimate what the gross margin would have been for 2012 if the price increase had notoccurred.


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  • CreatedSeptember 23, 2013
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