The financial statements of The North West Company Inc. are presented in Appendix A at the end of this book.

Instructions

(a) Is The North West Company a service company, merchandising company, or manufacturing company? Explain.

(b) Does The North West Company classify its operating expenses on its income statement by nature or by function? Explain.

(c) Are any non-operating revenues or expenses included in The North West Company's income statement? If so, identify the accounts included.

(d) Calculate The North West Company's gross profit margin for 2016 and 2015.

(e) Calculate The North West Company's profit margin for 2016 and 2015.

(f) Comment on the trend in The North West Company's gross profit margin and profit margin.