Without knowing the non-operating expenses for each year, it is impossible to determine whether the net income increased, decreased, or remained unchanged in this three-year period.
Generally, To determine the net income for the three years in question, we need to calculate the gross profit and operating income for each year.
Gross profit is calculated by subtracting the cost of goods sold from sales.
Operating income is calculated by subtracting operating expenses from gross profit.
Net income is calculated by subtracting any non-operating expenses (such as interest expense or taxes) from operating income.
Here is how we can calculate the net income for each year based on the information provided:
Current year:
Sales: 100.0%
Cost of goods sold: 63.3%
Operating expenses: 14.3%
Gross profit: 100.0% - 63.3% = 36.7% Operating income: 36.7% - 14.3% = 22.4%
Net income: 22.4% - any non-operating expenses
1 year ago:
Sales: 100.0%
Cost of goods sold: 61.1%
Operating expenses: 13.8%
Gross profit: 100.0% - 61.1% = 38.9% Operating income: 38.9% - 13.8% = 25.1%
Net income: 25.1% - any non-operating expenses
2 years ago:
Sales: 100.0%
Cost of goods sold: 56.8%
Operating expenses: 14.1%
Gross profit: 100.0% - 56.8% = 43.2% Operating income: 43.2% - 14.1% = 29.1%
Net income: 29.1% - any non-operating expense
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