An analyst prepares the following common-size income statements for Perez Company:

	20X1	20X2	20X3
Sales	100%	100%	100%
Cost of goods sold	50%	52%	53%
Selling and administrative expense	16%	12%	9%
Interest income	4%	4%	4%
Pretax income	30%	32%	34%
Income tax expense	15%	16%	17%
Net income	15%	16%	17%

Based only on this information, Perez's improving net profit margin is most likely a result of:

		improving gross margins.
		greater financial leverage.
		controlling operating expenses.

Answer rating: 100% (QA)

Based on the information provided Cost of goods sold as a percentage of sales ... View the full answer