Professor Elam

Tues Sept 27, 2011

We are studying merchandising companies in ACCT 3301. I mentioned that the Gross Margin percentage is closely watched by such companies. To see what I mean in class I will demonstrate the difference among different firms. 

But why wait, you can log into finance.yahoo.com and compare for your self. 

How does BIG, DLTR, FDO  compare one to the other, don't know those symbols, they are all successful dollar stores, Big Lots, Dollar Tree and Family Dollar. 

Now try SHLD, DDDS, JCP, or BBBY.  That would be Sears, Dillards, JC Penny and Bed Bath and Beyond. 

The discounters have a higher gross margin percentage. They have higher mark ups and distinctly lower overhead. If you compare the GM % of a like group you are performing horizontal analysis, which firm makes the most money on each sale?  Understanding how to use accounting information will make you a more successful investor.