- 6 - Year Net Revenues Net Income 1987 $21,922,286 $1,615,877 1988 25,060,137 1,314,997 1989 27,256,611 1,361,810 1990 29,770,281 1,002,367 1991 30,536,365 511,072 1992 (Projected) 31,260,786 1,434,198 As the foregoing table shows, Demco’s net revenues increased steadily from 1987 to 1991 and were projected to continue to increase in 1992. Demco’s net income, however, decreased from 1987-90, then fell more sharply in 1991, but was projected to recover in 1992. The decrease in Demco’s net income was not caused by any increase in Demco’s cost of goods sold; Demco’s gross margin increased from 43.9 percent of net revenues in 1987 to 45.5 percent of net revenues in 1991. Rather, Demco’s declining profitability was attributable to increases in its marketing and administrative expenses. From 1987 to 1991, Demco’s marketing expenses increased from 16.5 percent of net revenues to 19.3 percent; administrative expenses increased even more sharply over the same period, from 9.7 percent of net revenues to 16.3 percent. 2(...continued) expert Gary L. Schroeder (Mr. Schroeder) considered this information to be reliable and used it to prepare his report.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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