Question: The following data were extracted from the 2010 financial statements of Penske Automotive Group, Inc. This company operates automobile dealerships, mostly in the United States

The following data were extracted from the 2010 financial statements of Penske Automotive Group, Inc. This company operates automobile dealerships, mostly in the United States and the United Kingdom. The company had 323 dealerships as of the end of 2010.

Required
a. Compute Penske€™s gross margin percentage for 2010 and 2009.
b. Compute Penske€™s average days to sell inventory for 2010 and 2009.
c. How much higher or lower would Penske€™s earnings before taxes have been in 2010 if its gross margin percentage had been the same as it was in 2009? Show all supportingcomputations.

December 31, 2010 December 31, 2009 Revenue from car sales Cost of sales cars Gross profit-car sales Operating income before taxes Net income (loss) Ending inventory-cars S8,396,098 7,721,961 674,137 170,168 108,281 1,524,226 $7,251,724 6,652,349 599,375 128,958 76,461 1,302,495

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