Option #2: Analyze the Income Statement

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The following financial data pertains to Stellar Packaging Products, a US producer of coffee packaging for August 2016.

The company’s revenue for the period was $3,000,000. The cost of goods sold was $1,750,000. Period costs incurred were $345,000.


  1. Recall that the gross margin percentage = gross margin/revenue, and operating profit margin = operating income/revenue.
    1. Prepare an Excel format income statement to show the computation of Stellar Packaging’s gross margin and operating profit margin for the period ended August 31, 2016.
    2. Using that information, compute the gross margin percentage and operating margin percentage.
  1. Stellar Packaging’s closest publicly held competitor has a gross margin percentage of 30% and an operating profit margin of 10%. Using this data, compare and contrast Stellar Packaging’s performance for the period ended August 31, 2016 to that of its competitor. What are some things you could note regarding relative production cost and relative period costs in this comparison? Which company performed better in the period in question? Explain your answer.

Your response to both questions should meet the following requirements:

Provide your calculations in an Excel spreadsheet, clearly organized in an easy-to-read format. The written portion of your assignment should be submitted as a Word document.

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