Question

Walgreens Boots Alliance’s Sales, Cost of Goods Sold, and Gross Profit

The following information was summarized from the consolidated balance sheets of Walgreens Boots Alliance, Inc. and Subsidiaries (the company created with the combination of Walgreens and Boots Alliance) as of August 31, 2015 and 2014 and the consolidated statements of earnings for the years ended August 31, 2015 and 2014. All amounts are from Walgreens Boots Alliance’s 2015 Form 10-K.
(millions of dollars) 2015 2014
Accounts receivable, net $6,849 3,218
Cost of sales 76,520 54,823
Inventories 8,678 6,076
Net sales 103,444 76,392
1. Calculate the gross profit ratios for Walgreens Boots Alliance for 2015 and 2014 If required, round the percentage to one decimal place.
Walgreen's 2015 gross profit ratio: %
Walgreen's 2014 gross profit ratio: %

Answer 1

a. 26%

b. 28.2%

Step-by-step explanation:

Consider the following formula:

Gross profit ratio = Net sales - Cost of sales / Net sales

Walgreen's 2015 gross profit ratio: (103444-76520)/103444

26.0%

Walgreen's 2014 gross profit ratio: (76392-54823)/76392

28.2%