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The Haines Corporation shows the following financial data for 20X1 and 20X2:
| | 20X1 | 20X2 |
| Sales | $ 3,230,000 | $ 3,370,000 |
| Cost of goods sold | 2,130,000 | 2,850,000 |
| Gross profit | $ 1,100,000 | $ 520,000 |
| Selling & administrative expense | 298,000 | 227,000 |
| Operating profit | $ 802,000 | $ 293,000 |
| Interest expense | 47,200 | 51,600 |
| Income before taxes | $ 754,800 | $ 241,400 |
| Taxes (35%) | 264,180 | 84,490 |
| Income after taxes | $ 490,620 | $ 156,910 |
For each year, compute the following ratios and indicate how the change in each ratio will affect profitability in 20X2.
Note: Input your answers as a percent rounded to 2 decimal places.
| |
| | | | 20X1 | 20X2 | Profitability | | a. Cost of goods sold to sales | 2,130,000.00 | % | 65.94 | % | | | b. Selling and administrative expense to sales | | % | | % | | | c. Interest expense to sales | | % | | % | | |
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