# Family Home and Security, Inc. sells super padlocks. It reported an increase in net sales from...

## Question:

Family Home and Security, Inc. sells super padlocks. It reported an increase in net sales from {eq}5.0 {/eq} billion in 2014 to {eq}5.3 {/eq} billion in 2015, and an increase in gross profit from {eq}1.5 {/eq} billion in 2014 to {eq}1.7 {/eq} billion in 2015. Calculate each year's gross profit percentage: 2015 and 2014.

## Gross Profit Margin:

Gross profit margin is the percentage representation of gross profit in relation to the sales for the period. It measures the company's' operating performance in terms of operating profitability.

#### Gross profit percentage:

Gross profit percentage = gross profit / net sales

For the year 2014:

Net sales = $5.0 billion Gross profit =$1.5 billion

Gross profit percentage = $1.5 billion /$5.0 billion = 30%

For the year 2015:

Net sales = $5.3 billion Gross profit =$1.7 billion

Gross profit percentage = $1.7 billion /$5.3 billion = 32.08% 