yeh, juber, thats what i did....because, mathematically, net profit ratio = net profit divided by sales, so if sales increased, then cogs would proportionally increase, so gpr would stay the same...
heres an example:
sales = $10
cogs= $2
expenses=$4
then gross profit=$8, gp ratio = 80%
net profit = $4, np ratio = 40%
now, if sales increased to $14, cogs would increase proportionally to $6...but, expenses may not increase proportionally....thus, if expenses only rose to $6, the net profit would be $2...hence new np ratio = some 14% which is DECREASING.....meant to be INCREASING in the first year...
now, for example, if the expenses decreased to say $2, then net profit= $6, hence np ratio= 60%...which is INCREASING from 40%.......
i rest my case....lol....any errors in that??