The major shareholder of Port West Trading states that sales have increased, the company is profitable but
Question:
The major shareholder of Port West Trading states that sales have increased, the company is profitable but that cash flow is down. That is, the company had had to increase its short term borrowing. The following information is about Port West Trading Limited:
2014 | 2015 | 2016 | ||
Sales | 1,400,000 | 1,500,000 | 1,720,000 | |
Cost of goods sold | 1,316,000 | 1,450,000 | 1,680,000 | |
84,000 | 50,000 | 40,000 | ||
Inventory | 140,000 | 180,000 | 210,000 | |
Accounts receivable | 100,000 | 140,000 | 200,000 | |
Cash | 10,000 | 0 | 0 | |
Current assets | 250,000 | 320,000 | 410,000 | |
Accounts payable | 79,850 | 85,000 | 90,000 | |
Short term debt | 0 | 34,850 | 79,850 | |
Provisions- returns/refunds | 1,400 | 1,500 | 1,720 | |
Current liabilities | 81,250 | 121,350 | 171,570 | |
1 | Gross profit margin | 3.3% | 2.3% | |
2 | Current ratio | 2.6 | 2.4 | |
3 | Accounts receivable turnover | 10.7 | 8.6 | |
4 | Inventory turnover | 8.1 | 8.0 |
What is the gross profit margin percentage for 2014?
Expert Answer:
