Homework Help is Here – Start Your Trial Now!
Business
Accounting
The following financial information is given.   Year 1   Year 2   Book value of assets $18,000 $26,000 Market value of equity 18,000 60,000   12 months ended Year 1   12 months ended Year 2   Sales $  1,000 $  1,300 Cost of goods sold 500   700   Operating income 500 600 Depreciation expense 200 200 Interest expense 100   100   Pretax income 200 300 Income tax expense 80   120   Net income $     120   $     180   Using a common-size income statement, did operating income and net income increase or decrease?   Operating income     Net income     A. Increased   Decreased   B. Decreased   Decreased   C. Decreased   Increased   D. Increased   Increased

The following financial information is given.   Year 1   Year 2   Book value of assets $18,000 $26,000 Market value of equity 18,000 60,000   12 months ended Year 1   12 months ended Year 2   Sales $  1,000 $  1,300 Cost of goods sold 500   700   Operating income 500 600 Depreciation expense 200 200 Interest expense 100   100   Pretax income 200 300 Income tax expense 80   120   Net income $     120   $     180   Using a common-size income statement, did operating income and net income increase or decrease?   Operating income     Net income     A. Increased   Decreased   B. Decreased   Decreased   C. Decreased   Increased   D. Increased   Increased

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 19P
See similar textbooks
icon
Related questions
Question

The following financial information is given.

 
Year 1
 
Year 2
 
Book value of assets
$18,000
$26,000
Market value of equity
18,000
60,000
 
12 months ended Year 1
 
12 months ended Year 2
 
Sales
$  1,000
$  1,300
Cost of goods sold
500
 
700
 
Operating income
500
600
Depreciation expense
200
200
Interest expense
100
 
100
 
Pretax income
200
300
Income tax expense
80
 
120
 
Net income
$     120
 
$     180
 

Using a common-size income statement, did operating income and net income increase or decrease?

 

  • Operating income
     
     
    Net income
     
     
  • A.
    Increased
     
    Decreased
     
  • B.
    Decreased
     
    Decreased
     
  • C.
    Decreased
     
    Increased
     
  • D.
    Increased
     
    Increased
     
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Profit markup and markdown
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Entrepreneurial Finance
Entrepreneurial Finance
Finance
ISBN:
9781337635653
Author:
Leach
Publisher:
Cengage
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS