The Haines Corporation shows the following financial data for 20X1 and 20X2:
20X1 20X2
Sales $ 3,480,000 $ 3,140,000
Cost of goods sold 2,530,000 2,260,000
Gross profit $ 950,000 $ 880,000
Selling & administrative expense 255,000 261,000
Operating profit $ 695,000 $ 619,000
Interest expense 44,800 49,700
Income before taxes $ 650,200 $ 569,300
Taxes (35%) 227,570 199,255
Income after taxes $ 422,630 $ 370,045
For each year, compute the following ratios and indicate how the change in each ratio will affect profitability in 20X2.
Note: Input your answers as a percent rounded to 2 decimal places.
20X1 20X2 Profitability
a. Cost of goods sold to sales % %
b. Selling and administrative expense to sales % %
c. Interest expense to sales % %