Toy Shop Inc. has provided the following income statements:
2017
2016
2015
Net revenues
$3,787.2
$4,232.2
$3,304.5
Cost of goods sold
1,674.0
$1,698.2
1,366.1
Gross profit
2,113.2
2,534.0
1,938.4
Operating expenses
2,217.5
2,206.5
1,613.5
Income (loss) from operations
(104.3)
327.5
324.9
Nonoperating income (loss)
(121.7)
(53.7)
(21.4)
Income (loss) before taxes
(226.0)
273.8
303.5
Income tax (expense)/benefit
81.4
(84.9)
(97.1)
Net income (loss)
(144.6)
188.9
206.4
Required:
(1) Compute net profit margin for each year.
(2) Discuss some of the events that could have caused the changes to the net profit margin based on the income statement information above.

Question

Quizplus · Accepted Answer

The Answer of Toy Shop Inc. has provided the following income statements:
2017
2016
2015
Net revenues
$3,787.2
$4,232.2
$3,304.5
Cost of goods sold
1,674.0
$1,698.2
1,366.1
Gross profit
2,113.2
2,534.0
1,938.4
Operating expenses
2,217.5
2,206.5
1,613.5
Income (loss) from operations
(104.3)
327.5
324.9
Nonoperating income (loss)
(121.7)
(53.7)
(21.4)
Income (loss) before taxes
(226.0)
273.8
303.5
Income tax (expense)/benefit
81.4
(84.9)
(97.1)
Net income (loss)
(144.6)
188.9
206.4
Required:
(1) Compute net profit margin for each year.
(2) Discuss some of the events that could have caused the changes to the net profit margin based on the income statement information above.