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Petitioner operated on a fiscal year ending on October 31.
Petitioner's financial statements for the years in issue
delineated the following figures:
FYE 1990
Sales/revenue $10,271,148.12
Cost of goods sold (5,978,195.24)
Gross profit 4,292,952.88
Net income 192,865.38
Yearend net worth 194,490.31
FYE 1991
Sales/revenue $13,115,588.55
Cost of goods sold (7,324,963.44)
Gross profit 5,790,625.11
Net income 134,160.16
Yearend net worth 328,650.47
FYE 1992
Sales/revenue $12,310,770.53
Cost of goods sold (5,981,916.36)
Gross profit 6,328,854.17
Net income 143,809.07
Yearend net worth 472,459.54
Mr. Rosi calculated the compensation due under the plan. In
calculating the compensation, he referred to information
published annually in a survey of small businesses (the Survey).
For the 1990 calculation, he used 32.189 percent as the industry
average gross profit margin. For that year, the Survey reported
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