Business, 01.05.2021 01:10, smashbrosfan777
The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015). Let’s see whether these changes are reflected in the income statement of Insignia Corporation for the year ended December 31, 2015 (amounts in billions).
2015 2014
Revenues $225 $242
Cost of Purchased Crude Oil and Products 119 127
Other Operating Costs 59 52
Income before Income Tax Expense 47 63
Required:
a. Compute the gross profit percentage for each year. Assuming that the change from 2014 to 2015 is the beginning of a sustained trend, is Insignia likely to earn more or less gross profit from each dollar of sales in 2016?
b. Compute the net profit margin for each year.
Answers: 1
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The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40...
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