The financial statements of Shoppers Drug Mart are presented in Appendix A at the end of this book.

Instructions

(a) Is Shoppers Drug Mart a service company, merchandising company, or manufacturing company? Explain.

(b) Does Shoppers Drug Mart classify its operating expenses on its income statement by nature or by function? Explain.

(c) Are any non-operating revenues or expenses included in Shoppers Drug Mart's income statement? If so, identify the accounts included.

(d) Calculate Shoppers Drug Mart's gross profit margin for 2012 and 2011.

(e) Calculate Shoppers Drug Mart's profit margin for 2012 and 2011.

(f) Comment on the trend in Shoppers Drug Mart's gross profit margin and profit margin.