Selected information from Loblaw Companies Limited’s income statements for three recent years follows (dollars in millions):

Instructions
a. Calculate gross profit, and profit from operations, for each of the three years.

b. Calculate the percentage change in revenue and profit from operations, from 2017 to 2019.

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 for 2018 and 2019. Comment on any trend in this percentage.

f. Management often believes that profit from operations is a more meaningful basis of comparison than profit. Based on your findings in parts (d) and (e) above, do you agree or disagree
with this statement? Explain.

Transcribed Image Text:

Revenue Cost of sales Operating expense 2019 $48,037 33,281 12,486 2018 $46,693 32,499 12,271 2017 $46,587 32,913 11,625