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company Whole Food Market, find the data online and calculate GMI example Gross

ID: 2500488 • Letter: C

Question

company Whole Food Market, find the data online and calculate GMI

example

Gross Margin Index (GMI)

Comparing the gross margins from one period to the previous period produces the gross margin index. When the GMI is greater than 1 the company's gross margins have deteriorated and management is motivated to show better numbers. Like the SGI, the GMI sounds a potential note of caution. Finding a high GMI means auditors and CFEs should look deeper into reporting of sales and cost of goods sold.

(sales prior year minus cost of goods sold prior year)/sales prior year

Gross Margin Index = _____________________________

(sales current year minus cost of goods sold current year)/sales current year

Manipulators sported GMIs of 1.193 at the mean and 1.036 at the median. Enron soared into the upper ranges with 1.448.

Explanation / Answer

WHOLE FOOD MARKETS Period Ending Sep 27, 2015 Jul 5, 2015 Apr 12, 2015 Jan 18, 2015 Total Revenue 3438000 3632000 3648000 4671000 Cost of Revenue 2252000 2339000 2337000 3045000 Gross Profit 1186000 1293000 1311000 1626000 Gross MarginGP/Tot.Revenue 0.34497 0.35600 0.35938 0.34811 GMI= Last Yr GM/Current Yr GM 0.969 0.991 1.032 WHOLE FOOD MARKETS Period Ending Sep 27, 2015 Sep 28, 2014 Sep 29, 2013 Sep 30, 2012 Total Revenue 15389000 14194000 12917000 11699000 Cost of Revenue 9973000 9150000 8288000 7543000 Gross Profit 5416000 5044000 4629000 4156000 Gross Margin 0.35194 0.35536 0.35836 0.35524 GMI= Last Yr GM/Current Yr GM 0.990 0.992 1.009