54 Financial Statement Analysis YEAR 7 YEAR 6 YEAR 5 Change in Percent Index Change in Index Index Statement Item No. Percent No. No. Net sales 29% 100 90 Cost of goods sold Gross profit Operating expenses 139 100 85 126 100 80 20 100 65 100 Income before tax 14 70 CHECK Year 6 net income 129 Net income 100 75 percent, 33.3% Perform a comparative analysis of Eastman Corporation by completing the analysis below. Describe and comment on any significant findings in your comparative analysis. PROBLEM 1-3 Comparative Income Statement Analysis EASTMAN CORPORATION Income Statement ($ millions) For Years Ended December 31 Average Annual Cumulative Year 6 Year 5 Year 4 Amount Amount Net sales .. 2$ 2,610 $3,490 $2,860 24 Cost of goods sold 3,210 Gross profit 3,670 1,800 680 1,050 Operating expenses Income before taxes 2,740 215 105 $ 58 $ 145 $1,485 Net income CНЕCK Average net income, $563 Compute increases (decreases) in percents for both Years 6 and 7 by entering all the missing data in the table below. Analyze and interpret any significant results revealed from this trend analysis. PROBLEM 1-4 Index-Number Trend Analysis
54 Financial Statement Analysis YEAR 7 YEAR 6 YEAR 5 Change in Percent Index Change in Index Index Statement Item No. Percent No. No. Net sales 29% 100 90 Cost of goods sold Gross profit Operating expenses 139 100 85 126 100 80 20 100 65 100 Income before tax 14 70 CHECK Year 6 net income 129 Net income 100 75 percent, 33.3% Perform a comparative analysis of Eastman Corporation by completing the analysis below. Describe and comment on any significant findings in your comparative analysis. PROBLEM 1-3 Comparative Income Statement Analysis EASTMAN CORPORATION Income Statement ($ millions) For Years Ended December 31 Average Annual Cumulative Year 6 Year 5 Year 4 Amount Amount Net sales .. 2$ 2,610 $3,490 $2,860 24 Cost of goods sold 3,210 Gross profit 3,670 1,800 680 1,050 Operating expenses Income before taxes 2,740 215 105 $ 58 $ 145 $1,485 Net income CНЕCK Average net income, $563 Compute increases (decreases) in percents for both Years 6 and 7 by entering all the missing data in the table below. Analyze and interpret any significant results revealed from this trend analysis. PROBLEM 1-4 Index-Number Trend Analysis
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
How do you solve this problem (only asking about Problem 1-4. Wasn't sure if you need the previous charf in Problem 1-3 however, this is included in the image. I am totally lost as to the answer for Net Inc for year 6 being 33%of change (according to the book). How is this possible? Please advise.
Thanks,
Transcribed Image Text:54
Financial Statement Analysis
YEAR 7
YEAR 6
YEAR 5
Change in
Percent
Index
Change in
Index
Index
Statement Item
No.
Percent
No.
No.
Net sales
29%
100
90
Cost of goods sold
Gross profit
Operating expenses
139
100
85
126
100
80
20
100
65
100
Income before tax
14
70
CHECK
Year 6 net income
129
Net income
100
75
percent, 33.3%
Transcribed Image Text:Perform a comparative analysis of Eastman Corporation by completing the analysis below.
Describe and comment on any significant findings in your comparative analysis.
PROBLEM 1-3
Comparative Income
Statement Analysis
EASTMAN CORPORATION
Income Statement ($ millions)
For Years Ended December 31
Average
Annual
Cumulative
Year 6
Year 5
Year 4
Amount
Amount
Net sales ..
2$
2,610
$3,490
$2,860
24
Cost of goods sold
3,210
Gross profit
3,670
1,800
680
1,050
Operating expenses
Income before taxes
2,740
215
105
$ 58
$ 145
$1,485
Net income
CНЕCK
Average net income, $563
Compute increases (decreases) in percents for both Years 6 and 7 by entering all the missing
data in the table below. Analyze and interpret any significant results revealed from this trend
analysis.
PROBLEM 1-4
Index-Number
Trend Analysis
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