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):

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 thedifference?

Transcribed Image Text:

Sales of merchandise Income taxes Cash dividends declared on common stock Selling and administrative expense Cost of products sold Interest expense Other income Items not included in above amounts: Number of shares of common stock outstanding. 48,888 $1,220,568 44,763 21,500 345,183 734,547 2,850 839