Question: The February 21 2012 edition of the New York Times

The February 21, 2012, edition of the New York Times contains an article by Stephanie Clifford entitled “High-End Retailers Report Strong Profits, but Wal-Mart Still Struggles.”

Read the article and answer the following questions.
(a) Explain why Wal-Mart’s gross profit margin fell even though its total sales revenue increased.
(b) Saks Fifth Avenue experienced an increase in its gross profit rate for the year. What factors contributed to this increase?
(c) Macy’s experienced a decline in its gross profit rate. The article said that the decline could be attributed to two factors: a free-shipping promotion and markdowns on cold-weather gear.
Discuss whether this explanation is consistent with what you learned in this chapter about the financial presentation of these items in the income statement.
(d) The article mentions that Home Depot experienced increases in “same store sales.” What does “increase in same store sales” mean? What implications does an increase in same store sales have for the profit margin?

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