Charles Gibson Financial Statement Analysis Chapter 5

Topics: Revenue, Income statement, Generally Accepted Accounting Principles Pages: 4 (361 words) Published: November 1, 2010
PROBLEMS

1.Comparative income statements for 2006 and 2005 follow. FROM GIBSON, CHAPTER 5

| |2006 |2005 | |Sales |$9,434,000 |$7,862,000 | |Cost of Sales | 7,075,400 | 5,660,640 | |Gross Profit | $2,358,600 | $2,201,360 | |Operating Expenses | 1,367,690 | 1,365,060 | |Operating Income |$ 990,910 |$ 836,300 | |Interest Expense |   157,500 |   126,000 | |Earnings Before Tax |$ 833,410 |$ 710,300 | |Income Taxes |   400,000 |   317,200 | |Net Income |$  433,410 |$  393,100 |

Required:
|a. |Prepare a vertical common-size analysis of this statement for each year, using sales as the base. | | | | | | | | |2006 | | |2005 | | | | | |Sales...
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