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2016 2015 2014 2013
Sales (000) 14,211$ 12,916$ 11,462$ 10,351$
Cost of sales (000) 9,223 8,266 7,313 6,573
Gross margin 4,988$ 4,650$ 4,149$ 3,778$
Percent 35.1% 36.0% 36.2% 36.5%
Drug Nondrug Drug Nondrug Industry
Sales Sales COS COS GM
2016 $5,126 $9,085 $3,045 $6,178 32.7%
2015 $5,051 $7,865 $2,919 $5,347 32.9%
2014 $4,821 $6,641 $2,791 $4,522 33.0%
2013 $4,619 $5,732 $2,665 $3,908 33.2%
Drug % of Nondrug % of Drug Drug Nondrug
Sales Total Sales Sales Total Sales COS GM COS
2016 5,126 36.1% 9,085 63.9% 3,045 40.6% 6,178
2015 5,051 39.1% 7,865 60.9% 2,919 42.2% 5,347
2014 4,821 42.1% 6,641 57.9% 2,791 42.1% 4,522
2013 4,619 44.6% 5,732 55.4% 2,665 42.3% 3,908
The explanation given by Adams is correct in part, but appears to be overstated. The gross margin
percentage for nondrugs is approximately consistent. For drugs, the percent dropped significantly in
the current year, far more than the industry decline. The percent had been extremely stable before
2016.In dollars, the difference is approximately $82,000 (42.2% –40.6% x $5,126,000), which appears
to be significant. Of course, the decline in Jones’ prices may be greater than the industry due to
exceptional competition.
Nondrug
GM
32.0%
32.0%
31.9%
31.8%
margin
in
before
appears
to
