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Growth rate of sales, SG&A percentage, best profit margin

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2005 2006

Sales 550,000 585,000

Cost of Goods Sold 315,000 335,000

Operating Margin 235,000 250,000

Selling, General and Administrative Expenses 85,000 83,000

Depreciation and Amortization of Goodwill 58,000 55,000

Interest Expense 42,000 41,250

Gross Profit 50,000 70,750

Taxes 7,500 12,735

Net Income (earnings) 42,500 58,015

What is the growth rate of sales?

As a % of Sales, what change did SG&A achieve?

Did the firm change tax brackets from year to year?

What is the best net profit margin for the firm?

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The solution explains how to calculate the growth rate of sales, SG&A percentage and best profit margin

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What is the growth rate of sales?

Growth rate in sales = (585,000-550,000)/550,000 = 6.36%

As a % of Sales, what change did SG&A achieve?

In the year 2005, SG&A as a percentage of sales ...

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