Question

Refer to the following mentioned data. (In millions)

Net sales 2017: $ 34,412 2016: $ 30,135 2015: $ 26,795

Cost of products sold 2017: 14,613 2016: 13,145 2015: 13,236

Gross margin 2017: $ 19,799 2016: $ 16,990 2015: $ 13,559

Required: a. Calculate the gross profit ratio for each of the past three years. (Round your answers to 2 decimal places.)

b. Assume that Campbell’s net sales for the first four months of 2018 totaled $12.19 billion. Calculate an estimated cost of goods sold and gross profit for the four months, using the gross profit ratio for 2017. (Round intermediate calculations to 2 decimal places. Enter your answers in millions rounded to nearest whole number (i.e., 5,000,000 should be entered as 5).)

Answer 1

a.

	2017	2016	2015
Net Sales	34,412	30,135	26,795
Cost of products sold	14,613	13,145	13,236
Gross margin	19,799	16,990	13,559
Gross profit ratio (Gross Margin/Net sales)	57.54%	56.38%	50.60%

b.

Net sales = $12.19 billion

= 12.19 x 1,000

= $12,190 million

Gross profit ratio = 57.54%

Gross profit = Net sales x Gross profit ratio

= 12,190 x 57.54%

= 7,014 million

Cost of goods sold = Net sales - Gross profit

= 12,190-7,014

= $5,176 million

Kindly comment if you need further assistance.

Thanks‼!