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chloe
TOPIC QUESTION - PAPER 1
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chloe
October 21, 2025 at 6:20:36 AM
Feb/Mar 2018
Version 2
5.0 Financial Information and Decisions
5.5 Analysis of Accounts
YOUR ANSWER
The gross profit margin had decreased by 8% in 2017 compared to 2016, which may be because the cost of buying raw materials for producing shirts are too high. The net profit margin of Pshirts has aslso decreased by 15% in 2017 compared to 2016. This may be because expenses are too high.
Paul should be worried because there is a big gap between 2016 and 2017’s gross and profit margins. This means that Pshirts needs to change its supplier to decrease cost of raw materials or reduce expenses.
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