Question

Nexxus Computers reported the information shown as follows: (Click the icon to view the income statement.) (Click the icon to view the balance sheet.) Required 1. Is Nexxus Computers a merchandising entity, a service business, or both? How can you tell? List the items in Nexxus Computers' financial statements that influence your answer. 2. Compute Nexxus Computers' gross margin for fiscal years 2023 and 2022. Did the gross margin increase or decrease in 2023 ? Is this a good sign or a bad sign about the company? Requirement 1. Is Nexxus Computers a merchandising entity, a service business, or both? How can you tell? List the items in Nexxus Computers' financial statements that influence your answer. Nexxus Computers is List the items in Nexxus Computers' financial statements that influence your answer. (If a box is not used in the table, leave the box blank; do not select a label.) Income Statement Balance Sheet Requirement 2. Compute Nexxus Computers' gross margin for fiscal years 2023 and 2022 . Did the gross margin increase or decrease in 2023 ? Is this a good sign or a bad sign about the company? What is the gross margin for 2022? What is the gross margin for 2023? In 2023, the gross margin This is a sign about the company. To: The Owner From: Student Subject: Trend of sales, gross margin, and net income for Nexxus Computers In fiscal year 2023, Nexxus Computers' sales, gross margin, and net income These trends lead to outlook for the company. exxus Computers reported the information shown as follows: (Click the icon to view the income statement.) (Click the icon to view the balance sheet.) equired . Is Nexxus Computers a merchandising entity, a service business, or both? How can you tell? List the items in Nexxus Computers' financial statements that influence your answer. 2. Compute Nexxus Computers' gross margin for fiscal years 2023 and 2022. Did the gross margin increase or decrease in 2023 ? Is this a good sign or a bad sign about the company? Income statement items in Balance sheet

Answer 1

Nexxus Computers' classification as a merchandising entity or service business depends on items in the financial statements like COGS and inventory. Gross margin, which reflects operational efficiency, is calculated from sales minus COGS and changes in gross margin can indicate shifts in the company's profitability.

Step-by-step explanation:

To determine if Nexxus Computers is a merchandising entity, a service business, or both, we need to examine specific items on the income statement and balance sheet. A merchandising entity would typically have cost of goods sold (COGS) and inventory listed on its financial statements, which are directly related to the purchase and sale of goods. A service business, on the other hand, would not showcase COGS or inventory but would have service-related revenues and possibly direct costs of services provided.

As for the gross margin, it is calculated as Sales minus Cost of Goods Sold (COGS). To determine whether the gross margin has increased or decreased, we compare the gross margin of 2023 to that of 2022. An increase in gross margin is typically seen as a positive sign, indicating that the company is becoming more efficient in producing or sourcing its products, or that it has more pricing power. Conversely, a decrease in gross margin could suggest a rise in COGS, increased competition leading to lower selling prices or less efficient operations.

Without the actual financial figures, we cannot compute the exact gross margins or comment on the trends of sales, gross margin, and net income for Nexxus Computers. However, this analysis would be crucial for understanding the company’s operational performance and future outlook.