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Data Analysis Financial Statement Basics The Profit & Loss Statement Profit & Loss Statement Assessment

Posted by Sarah Torres
Sarah Torres
1,821 Points

I don't understand what it is asking and what formula to use to find the answer.

It is asking about the SG&A margin contraction or expansion. What would I am I looking for in year 1 to 2? What method am I using to get an answer?

1 Answer

Jennifer Nordell
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STAFF
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Jennifer Nordell
Treehouse Teacher
Jennifer Nordell
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Jennifer Nordell
Treehouse Teacher

Hi there, Sarah Torres ! I received your request for assistance. I can tell you how I did it :smiley: I took the SG&A of year and divided it by the total revenue for year 1 which gave me a margin (in percentage) of 7.66 percent. Then I did the same thing for Year 2 which gave me a percentage of 7.75 percent and the difference there is 0.09% but isn't in the range of anything in the answers.

So I tried something. I did the same thing for Year 3 which gave me a SGA margin of 7.91% and the difference between Year 2 SGA margin and Year 3 SGA margin results in a 0.16% expansion which leads me to believe there might be a typo in this question so I'm going to tag the brilliant Michael Watson to either confirm this or show us both what we did incorrectly :smiley:

Hope this helps! :sparkles:

Sarah Torres
Sarah Torres
1,821 Points

Thank you. I really appreciate the help!

Michael Watson
Michael Watson
Treehouse Teacher
Michael Watson
Michael Watson
Treehouse Teacher

Hi Sarah Torres , I'm so sorry about that. Jennifer Nordell is correct. The typo in the quiz has been fixed.