Total conkers. What’s the explanation?
huh?
I think he’s playing with us…
This is what i was told… If gross profits rise and operating profits are flat, the likely reasons are either higher sales or lower cost of goods sold (COGS) with the most likely being an increase in sales greater than an increase in COGS. Higher sales would most likely lead to an increase in inventory turnover due to a related increase in COGS or lower average inventory on hand. Flat profits and minimal investment in new assets are likely to limit the growth of ROE and ROA. Without increases in the asset base or decreases in equity, financial leverage is not likely to rise. Personally i think its Bull $hit that we assume Revenue rises more then COGS fall. F@ck Schweser
explanation pls??
actually that makes sense.
it doesn’t make sense… there is nothing that indicates that you should assume sales will grow more than cogs… i’m starting to really get annoyed with schweser…really…
GP = sales - cogs? so if GP goes up I would guess sales rose more than cogs or cogs fell more than sales.
mumukada Wrote: ------------------------------------------------------- > it doesn’t make sense… > > there is nothing that indicates that you should > assume sales will grow more than cogs… > > i’m starting to really get annoyed with > schweser…really… Assumption that sales will grow more than COGS does make some sense. This is because you will selling (revenue) at more than your cost (COGS). An increase in GP is infact quite common and most of the time it will be due to increase in number of goods sold.