Interactive workbook: Go back over this again - Exercise 8.5 - Causes of rises and falls in the gross profit percentage - Introduction to Accounting 2e Student Resources

Ratio analysis 1: profitability, ef ficiency, and performance

Instructions

Listed below are factors affecting the gross profit percentage. Think about whether each of these factors will cause gross profit percentage to rise or to fall.

a)	Higher bulk discounts from suppliers
b)	Strikes
c)	Selling higher margin goods
d)	Selling more budget items
e)	Reducing the number of goods discounted in annual sales
f)	Higher staff productivity
g)	Not passing on rises in input prices to customers
h)	Increased competition
i)	Reduced production costs
j)	Higher bulk discounts offered to customers
k)	Reduced demand in a depressed economy
l)	Raising selling prices more quickly than input costs are rising