Selected information from Big Rock Brewery Inc.'s income statements for three recent years follows (in thousands): Instructions
Question:
Instructions
(a) Calculate gross profit, profit from operations, and profit for each of the three years.
(b) Calculate the percentage change in net revenue and profit from operations, from 2009 to 2011.
(c) Calculate the gross profit margin for each of the three years. Comment on any trend in this percentage.
(d) Calculate the profit margin for each of the three years. Comment on any trend in this percentage.
(e) Calculate profit margin again using profit from operations instead of profit. Comment on any trend in this percentage.
(f) In Big Rock Brewery's 2011 annual report management states that they believe profit from operations is a more meaningful basis of comparison than profit. Based on your findings in (d) and (e) above, do you agree or disagree with this statement? Explain.
Step by Step Answer:
Accounting Principles Part 1
ISBN: 978-1118306789
6th Canadian edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow