Stella Ltd Using a Vertical Trend Analysis with Net Sales as a from 2020

question 8

Multiple Choice

Stella Ltd. has provided you with the following selected information from 2020 and 2021: $$\begin{array} { l r r } &2021&2020 \\\hline\text { Sales } &{ \$ } &{ \$740,000 } \\ & 785,000 & \\\text { Sales returns and allowances } & 55,200 & 52,000 \\\text { Cost of goods sold } & 358,000 & 305,000 \\\text { Operating expenses } & 285,000 & 255,000 \\\text { Profit } & 86,800 & 128,000\end{array}$$ Using a vertical trend analysis with net sales as a base, which of the following most accurately depicts the information stated above?

• A) Profit as a percentage of net sales decreased by 6.7 percentage points.
• B) Cost of goods sold as a percentage of net sales decreased by 5 percentage points.
• C) Profit as a percentage of net sales did not change significantly from 2020.
• D) Cost of goods sold as a percentage of net sales remained consistent from 2020.

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Definitions:

Fire-Retardant

A substance that is applied to material or integrated into it to decrease the flammability and resist the spread of fire.

Curiosity Approach

A sales technique aimed at sparking the prospect's interest or curiosity about a product or service to engage them further in the sales conversation.

Question Approaches

Techniques used in sales and negotiations that involve asking questions to better understand customer needs, build rapport, and guide conversations.

Pre-Approaches

The preparatory steps or research conducted by a salesperson before making a sales presentation or meeting a potential client.