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From the following information, interpret the result of operations of a manufacturing using trend ratios : 2008 100 60 40 10 30 15 15 2009 90 60 30 10 20 10 10 2010 120 70 50 15 35 17.5 17.5 Sales (Net) Less: Cost of goods sold Gross Profit Less:Operating expenses Net operating profit Less taxes Profit after tax?
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From the following information, interpret the result of operations of ...
Interpreting Trend Ratios for a Manufacturing Company


Sales


  • 2008: 100

  • 2009: 90

  • 2010: 120


The trend ratio for sales is calculated by dividing the sales of the current year by the sales of the base year and multiplying by 100.


  • 2009 trend ratio = (90/100)*100 = 90%

  • 2010 trend ratio = (120/100)*100 = 120%


The trend ratio for sales shows a decrease in 2009 and a significant increase in 2010 compared to the base year 2008.


Cost of Goods Sold


  • 2008: 100

  • 2009: 60

  • 2010: 70


The trend ratio for cost of goods sold is calculated by dividing the cost of goods sold of the current year by the cost of goods sold of the base year and multiplying by 100.


  • 2009 trend ratio = (60/100)*100 = 60%

  • 2010 trend ratio = (70/100)*100 = 70%


The trend ratio for cost of goods sold shows a decrease in 2009 and a slight increase in 2010 compared to the base year 2008.


Gross Profit


  • 2008: 100

  • 2009: 40

  • 2010: 50


The trend ratio for gross profit is calculated by dividing the gross profit of the current year by the gross profit of the base year and multiplying by 100.


  • 2009 trend ratio = (40/100)*100 = 40%

  • 2010 trend ratio = (50/100)*100 = 50%


The trend ratio for gross profit shows a decrease in 2009 and a slight increase in 2010 compared to the base year 2008.


Operating Expenses


  • 2008: 100

  • 2009: 10

  • 2010: 15


The trend ratio for operating expenses is calculated by dividing the operating expenses of the current year by the operating expenses of the base year and multiplying by 100.


  • 2009 trend ratio = (10/100)*100 = 10%

  • 2010 trend ratio = (15/100)*100 = 15%


The trend ratio for operating expenses shows a significant decrease in 2009 and a slight increase in 2010 compared to the base year 2008.


Net Operating Profit


  • 2008: 100

  • 2009: 30

  • 2010: 35


The trend ratio for net operating profit is calculated by dividing the net operating profit
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From the following information, interpret the result of operations of a manufacturing using trend ratios : 2008 100 60 40 10 30 15 15 2009 90 60 30 10 20 10 10 2010 120 70 50 15 35 17.5 17.5 Sales (Net) Less: Cost of goods sold Gross Profit Less:Operating expenses Net operating profit Less taxes Profit after tax?
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From the following information, interpret the result of operations of a manufacturing using trend ratios : 2008 100 60 40 10 30 15 15 2009 90 60 30 10 20 10 10 2010 120 70 50 15 35 17.5 17.5 Sales (Net) Less: Cost of goods sold Gross Profit Less:Operating expenses Net operating profit Less taxes Profit after tax? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about From the following information, interpret the result of operations of a manufacturing using trend ratios : 2008 100 60 40 10 30 15 15 2009 90 60 30 10 20 10 10 2010 120 70 50 15 35 17.5 17.5 Sales (Net) Less: Cost of goods sold Gross Profit Less:Operating expenses Net operating profit Less taxes Profit after tax? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for From the following information, interpret the result of operations of a manufacturing using trend ratios : 2008 100 60 40 10 30 15 15 2009 90 60 30 10 20 10 10 2010 120 70 50 15 35 17.5 17.5 Sales (Net) Less: Cost of goods sold Gross Profit Less:Operating expenses Net operating profit Less taxes Profit after tax?.
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