Question: The following data were extracted from the 2013 financial statements of Penske Automotive Group, Inc. This company operates automobile dealerships, mostly in the United States

The following data were extracted from the 2013 financial statements of Penske Automotive Group, Inc. This company operates automobile dealerships, mostly in the United States and the United Kingdom. The company had 327 dealerships as of the end of 2013. Dollar amounts are in millions.

Required
a. Compute Penske€™s gross margin percentage for 2013 and 2012.
b. Compute Penske€™s average days to sell inventory for 2013 and 2012.
c. How much higher or lower would Penske€™s earnings before taxes have been in 2013 if it€™s gross margin percentage had been the same as it was in 2012? Show all supporting computations.

December 31, 2013 December 31, 2012 Revenue from car sales Cost of sales cars Gross profit-car sales Operating income before taxes Net income (loss) Ending inventory-cars $11,858.7 10,962.8 895.9 375.4 245.7 2,538.3 $10,453.8 9,625.5 828.3 290.1 187.2 1,975.7

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All dollar amounts are in millions a 2013 2012 Gross margin 8959 8283 Sales 118587 104538 Gross marg... View full answer

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