Chapter 9

between A and B



~decrease operating expenses
~decrease COGS by buying from cheaper supplier or through bulk purchase to
enjoy trade discount
~increase sales by selling at a lower price to increase qty sold or increase the selling
price perunit so as to achieve higher mark-up

(4)Suggest two ways which one can take to improve his gross profit/
~He can sell more goods.
~he can source for cheaper cost for the goods he buy.
~he can sell his goods at a higher price(either two).

(5)Explain why the gross profit has decreased even though the sales has
increased. Suggest what could be done to increase the gross profit.

Higher cost of purchase:
Source for cheaper, but quality goods.

Improvement to net profit:
lower its operating expenses
agreesive sales strategies

(6)By studying the figures given and the ratios you have calculated is the net
profit trend satisfactory?
Give two reasons for your answer. These reasons shld be supported by
reference to facts disclosed by the summarized accounts and the table in (a) that
you have completed.