The income statement for Forklift Electrical Ltd for two years is attached as a pic.Determine the operating income (loss) (dollars) for each year. The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the amounts of the total assets as the investment base, calculate the return on investment.Was the decision to invest additional assets in the company successful? Explain Forklift Electrical LtdIncome Statement ComparisonCurrent yearPrior Year(amounts in thousands)Sales$ 33,750$ 24,750Cost of goods sold21,93816,830Gross profit$ 11,812$ 7,920Wages$ 8,775$ 6,188Utilities675250Repairs169325Selling506200Total expenses$ 10,125$ 6,963Total assets (investment base) $ 4,500$ 1,500

Return on investment is a ratio that shows how much return or income is being generated by investing…

Answered: he income statement for Forklift…

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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The income statement for Forklift Electrical Ltd for two years is attached as a pic.

Determine the operating income (loss) (dollars) for each year.
The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the amounts of the total assets as the investment base, calculate the return on investment.
Was the decision to invest additional assets in the company successful? Explain

Forklift Electrical Ltd
Income Statement Comparison
Current year
Prior Year
(amounts in thousands)
Sales
$ 33,750
$ 24,750
Cost of goods sold
21,938
16,830
Gross profit
$ 11,812
$ 7,920
Wages
$ 8,775
$ 6,188
Utilities
675
250
Repairs
169
325
Selling
506
200
Total expenses
$ 10,125
$ 6,963
Total assets (investment base) $ 4,500
$ 1,500

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