Use the Table for the Question(s) Below

question 60

Multiple Choice

Use the table for the question(s) below.
Income Statement for Xenon Manufacturing:
Selling, general,
Earnings before interest

-Consider the above Income Statement for Xenon Manufacturing. All values are in millions of dollars. Calculate the gross margin for 2008 and 2009. What does the change in the gross margin between these two years imply about the company?

• A) The efficiency of Xenon Manufacturing has significantly risen between 2008 and 2009.
• B) The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them rose between 2008 and 2009.
• C) The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them fell between 2008 and 2009.
• D) The leverage of Xenon Manufacturing fell slightly between 2008 and 2009.

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Definitions:

Continuously Innovate

The ongoing commitment of businesses to develop new products, services, or processes to meet changing market demands and stay ahead of competition.

Profitable Growth

When a company increases revenues in excess of expenses over time

Support Function

Services or activities within an organization that assist the core operations or departments without directly generating profit, such as HR and IT.

Value Chain Analysis

A method for dissecting a business's activities to assess its competitive strengths and identify ways to create efficiency and value.