### Financial Analysis Exercise: Bluestem Company**Revenue and Expense Data for Bluestem Company:**| **Category** | **Year 2** | **Year 1** ||-------------------------------|------------|------------|| Administrative expenses | $37,000 | $20,000 || Cost of merchandise sold | $350,000 | $320,000 || Income tax expense | $40,000 | $32,000 || Sales | $800,000 | $700,000 || Selling expenses | $150,000 | $110,000 |#### Instructions:a. **Prepare a Comparative Income Statement**- Conduct a vertical analysis, expressing each line item for both years as a percentage of sales.- Round percentages to one decimal place.**Bluestem Company Comparative Income Statement**For the Years Ended December 31, Year 2 and Year 1| **Category** | **Year 2 Amount** | **Year 2 Percent** | **Year 1 Amount** | **Year 1 Percent** ||-----------------------------|-------------------|--------------------|-------------------|--------------------|| Sales | $800,000 | | $700,000 | || Cost of Merchandise Sold | | | | || Gross Profit | | | | || Administrative Expenses | | | | || Selling Expenses | | | | || Total Operating Expenses | | | | || Income Before Income Tax | | | | || Income Tax Expense | | | | || Net Income | | | | |b. **Analyze Significant Changes**- Identify the most significant increase in expenses.- Discuss how it offsets the decrease in net income.**Question:**- The most significant increase in expenses is ______, which offsets the decrease in ______, resulting in the overall ______ of net income.

Vertical analysis enables direct comparison of several components and aids in understanding the…

Answered: Administrative expenses Cost of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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ElectrohicS Tannenhill Industry Company Average Sales $1,510,000 100 % Cost of goods sold 921,100 67 Gross profit $588,900 33 % Selling expenses $362,400 19 % Administrative expenses 135,900 8. Total operating expenses $498,300 27 % Operating income $90,600 6 % Other revenue 30,200 2 $120,800 8 % Other expense 15,100 1 Income before income tax $105,700 7 % Income tax expense 45,300 5 Net income $60,400 2 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers. Tannenhill Company Common-Sized Income Statement For the Year Ended December 31 Tannenhill Tannenhill Electronics Company Company Industry Amount Percent Average Sales $1,510,000 % 100.0% Cost of goods sold 921,100 % 67% Gross profit $588,900 % 33% Selling expenses $362,400 % 19% Administrative expenses 135,900 % 8% Total operating expenses $498,300 % 27% Income from…
Sales revenue HK$112,000 Gain on sale of plant assets 33,600 Selling and administrative expenses 11,200 Cost of goods sold 61,600 Interest expense 5,600 Income tax rate 20 % Determine (a) Income from operations HK$enter a hong kong dollar amount
The Haines Corporation shows the following financial data for 20X1 and 20X2: 20X2 $ 3,000,000 2,060,000 $ 940,000 300,000 $ 640,000 54,400 $ 585,600 204,960 $ 380,640 Sales Cost of goods sold Gross profit Selling & administrative expense Operating profit Interest expense Income before taxes Taxes (35%) Income after taxes 20X1 $ 3,400,000 1,880,000 $ 1,520,000 302,000 $ 1,218,000 48,000 $ 1,170,000 409,500 $ 760,500 For each year, compute the following ratios and indicate how the change in each ratio will affect profitability in 20x2. Note: Input your answers as a percent rounded to 2 decimal places. a. Cost of goods sold to sales b. Selling and administrative expense to sales c. Interest expense to sales 20X1 % % % 20X2 Profitability % Decrease % Increase % Decrease
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Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Sales $10,850,000.00 $10,000,000.00 3 Cost of goods sold 6,000,000.00 5,450,000.00 4 Gross profit $4,850,000.00 $4,550,000.00 5 Selling expenses $2,170,000.00 $2,000,000.00 6 Administrative expenses 1,627,500.00 1,500,000.00 7 Total operating expenses $3,797,500.00 $3,500,000.00 8 Income from operations $1,052,500.00 $1,050,000.00 9 Other revenue 99,500.00 20,000.00 10 $1,152,000.00 $1,070,000.00 11 Other expense (interest) 132,000.00 120,000.00 12 Income before income tax $1,020,000.00 $950,000.00 13 Income tax expense 420,000.00 400,000.00 14 Net income $600,000.00 $550,000.00 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Assets…
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Based on the table given below, Net Income Model Data 1 B Sales Cost of Goods Sold $10.000.000 6400.000 Administrative Expenses 500,000 Selling Expenses 5.900.000 Depreciation Expenses 250.000 10 Interest Expenses 20000 11 Taxes $620,000 12 13 Model 14 15 Kiss Profi 1,000,000 16 Operating Expenses 52.110.000 19 Net Operating Inome 1.450.000 arnings Before Tenes 1350.000 19 20 Net Income which of the following formulas would be used to calculate the net income value using only the information in the Model, and not in the Data section?. -B6-B15 -B15-B16-B17+B18 -B5-B17 -B18-B11
Financial information is presented below: Operating expenses $ 33000 Sales revenue 211000 Cost of goods sold 129000 Gross profit would be $178000. $ 82000. $ 33000. $ 49000.
Financial information is presented below: Operating Expenses $56000 Sales Revenue Cost of Goods Sold Gross profit would be $48000. $238000. $182000. $104000. 238000 134000
Years Revenue Cash Expense Book Depreciation Book Income Pre-Tax Book Tax at 32% After Tax Book Income Financial Measures Profit Margin % Net Assets ROA % Cashflow Revenue Cash Expense Tax Depreciation Pretax Income Tax at 32% After Tax Income After Tax Cashflow Cumulative Cashflow Payback Period Present Worth 10 PW12 PW15 IRR PV Index(15) Facility Cost Income Tax Rate 0 C. -9.5 d. -12.4 $ 100,000.00 2.2 Years 91740.92679 0.395702526 1 0.684350818 $ 100,000.00 32% $30,000.00 $100,000.00 $120,000.00 $140,000.00 $150,000.00 $150,000.00 $50,000.00 $60,000.00 $70,000.00 $75,000.00 $75,000.00 2 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $0.20 $20,400.00 $27,200.00 $0.26 $9,600.00 $12,800.00 $16,000.00 $17,600.00 $17,600.00 $20,400.00 ($100,000.00) $40,400.00 $51,040.00 ($100,000.00) -$59,600.00 -$8,560.00 $40,000.00 $50,000.00 $55,000.00 $55,000.00 $0.23 3 $0.45 $36,727.27 $80,000.00 $60,000.00 $40,000.00 $20,000.00 $0.85 $1.87 4 $19,040.00 5 $34,000.00 $37,400.00 $0.24…
Sales revenue $104,000 $enter a dollar amount Sales returns and allowances enter a dollar amount 4,000 Net sales 98,000 129,000 Cost of goods sold 64,600 enter a dollar amount Gross profit enter a dollar amount 56,760 Operating expenses 20,400 enter a dollar amount Net income enter a dollar amount 21,930 Calculate the profit margin and the gross profit rate for each company. (Round answers to 1 decimal place, e.g. 75.5%.) Crane Company Sheridan Company Profit margin enter profit margin in percentages rounded to 1 decimal place % enter profit margin in percentages rounded to 1 decimal place % Gross profit rate enter gross profit rate in percentages rounded to 1 decimal place % enter gross profit rate in percentages rounded to 1 decimal place %
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Administrative expenses Cost of merchandise sold Income tax expense Sales Selling expenses $37,000 350,000 40,000 800,000 150,000 Year $20,000 320,000 32,000 700,000 110,000