Following is the Operating Statement for Silhouette Brands, Inc. I’ve added three columns of percentages to give you more…

Following is the Operating Statement for Silhouette Brands, Inc. I’ve added three columns of percentages to give you more data to consider as you evaluate the Operating Statement.
Keep in mind the following: Your grade for this assignment will be based not only upon getting correct answers, but also upon how well you demonstrate the depth and breadth of your knowledge and understanding of the material. A discussion of the material, not one or two word answers, is what is expected and upon what you will be graded.

. 2002 2001 ’01 to ’02
. $ % of Sales $ % of Sales % increase
Net sales 62349545 26072585 139.1%

Cost of Goods Sold 51402174 82.4% 21010605 80.6% 144.6%
Gross Profit 10947371 17.6% 5061980 19.4% 116.3%

Advertising 1818126 2.9% 327479 1.3% 455.2%
General & Administrative 8067331 12.9% 4162408 16.0% 93.8%
Total Operating Exp 9885457 15.9% 4489887 17.2% 120.2%

Income from Operations 1061914 1.7% 572093 2.2% 85.6%

Interest Income 17977 0.0% 16237 0.1% 10.7%
Gain on Marketable Securities 0.0% 41962 0.2% -100.0%
Interest Expense -2400 0.0% -3184 0.0% -24.6%
Total Other 15577 0.0% 55015 0.2% -71.7%

Income Before Taxes 1077491 1.7% 627108 2.4% 71.8%

Taxes 536143 0.9% 161000 0.6% 233.0%

Net Income 541348 0.9% 466108 1.8% 16.1%
Consider the following questions in your evaluation:
1. What was the percentage increase in sales from 2001 to 2002?
2. What impact did the new sales have on the gross profit?
3. Were the new sales more or less profitable sales based upon their impact on the gross profit?
4. What happened to the advertising expenses ($ & %)?
5. Is the change in advertising likely to be long term? Why?
6. What impact did the new sales have on G&A (General & Administrative)? Why?
7. Are total operating expenses up or down as a percentage?
8. What impact does the change in operating expenses have on the bottom line?
9. Is income from operations up or down ($ & %)?