Form 10KSB for CHINA 3C GROUP 2-Apr-2007 Annual Report
Gross Profit Margin
Gross profit margin for 2006 was 15.39% compared to 13.08% for 2005. The increase was partially due to the inclusion of the newly acquired subsidiaries. The average profit margin for the newly acquired companies is approximately 18%. The increase was also due to the increase in consumer demand and improvement in product mix.
Operating Expense
General and administrative expense for 2006 totaled $5,544,924 or approximately 3.74% of net sales, compared to $1,706,869 or approximately 5.2% for 2005. The decrease of 1.46% was due to the inclusion of the newly acquired subsidiaries.
Income from Operations
Income from operations for 2006 was $17,262,166 or 11.65% of net sales as compared to income from operations of $2,556,433 for 2005 or 7.84% of net sales. The increase was due to our acquisitions during 2006, an increase in consumer demand and improvement in product mix.
Interest Expense
Interest expense for 2006 totaled $7,565 compared to $2,954 for 2005. The increase was due to the inclusion in our financial statements of our newly acquired subsidiary Shanghai Joy & Harmony Electronics Company Limited.
Net Income
Net income was $11,277,126 or 7.61% of net Sales for 2006 compared to $1,458,250 or 4.47% of net Sales for 2005. The increase in percentage was due to the factors stated above, including lower cost of goods, lower operating expenses and high profit margin from the newly acquired companies.
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