What might account for the trends in the ratios, Managerial Accounting

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What might account for the trends in the ratios

Problem

You are examining the common-size income statements for a company for the past five years and you have noticed that the cost of goods sold as a percentage of sales has been increasing steadily. At the same time, EBIT as a percentage of sales has been decreasing. What might account for the trends in these ratios? What actions might managers take to improve these ratios? Explain in detail.

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Managerial Accounting: What might account for the trends in the ratios

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