Gross Profit discussion post, accounting homework help

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Sam Hernandez has noticed a marked decline in his gross profit percentage from last year to this year, from 60% down to 40%. As his business manager, Sam has asked you why this occurred, and how to rectify the situation. After all, sales have not really changed, so what has happened to cause this situation?

Part one: (needs to be atleast 110 words)

For your initial post, share your immediate thoughts and concerns about why this situation may have occurred. With a decrease in gross profit percentage this large, are there concerns about the stability and future viability of the business continuing as a going concern?

Part two:  (needs to be atleast 110 words)

Now that you have explored some of the possible reasons for the decline in gross profit percentage year over year and reviewed the ideas your classmates have posted, think about the way you would respond to Sam in this scenario. For your second post, draft an email to Sam to address his questions and offer your solution, and submit it to the discussion forum as a separate new post.

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