Are selling costs (sales, salaries, advertising, delivery) increasing, decreasing, or remaining the same in relation to sales?
If selling costs are increasing faster than sales, each dollar spent on selling effort is bringing in a smaller return. This information may suggest possible ways of increasing the efficiency of the company’s sales effort, 19. What is the ratio of net sales to gross sales and what has been the trend of this ratio over the past years? An increase in the difference between net and gross sales may indicate weaknesses within the company in policy, sales effectiveness, merchandising, quality control, or a combination of two or more of these factors. 20. What are the reasons for customer returns and allowances and what action is being taken to reduce them, if reduction is possible? Care should be taken in analyzing the sales of a company to see that gross sales are not taken as net sales, particularly if lenient returns and allowances have been a part of the sales program. 21. What has been the pattern in the value of the average transaction over the past years? Sales may be stationary, but
