Finance
SunShine Systems (trends, ratios stock performance) (LO3) SunShine Systems is a leading supplier of computer related products, including servers, workstations, storage devices, and network switches.
In the letter to stockholders as part of the 2012 annual report, President and CEO Scott G. McNealy offered the following remarks:
Fiscal 2012 was clearly a mixed bag for Sun, the industry, and the economy as a whole. Still, we finished with revenue growth of 16 percent—and that’s significant. We believe it’s a good indication that Sun continued to pull away from the pack and gain market share. For that, we owe a debt of gratitude to our employees worldwide, who aggressively brought costs down— even as they continued to bring exciting new products to market.
The statement would not appear to be telling you enough. For example, McNealy says the year was a mixed bag with revenue growth of 16 percent. But what about earnings? You can delve further by examining the income statement in Exhibit 1. Also, for additional analysis of other factors, consolidated balance sheet(s) are presented in Exhibit 2 below.
1. Referring to Exhibit 1, compute the annual percentage change in net income per common share-diluted (second numerical line from the bottom) for 2009-2010, 2010–2011, and 2011–2012. 2. Also in Exhibit 1, compute net income/net revenue (sales) for each of the four years. Begin with 2009. 3. What is the major reason for the change in the answer for Question 2 between 2011 and 2012? To answer this question for each of the two years, take the ratio of the major income statement accounts to net revenues (sales).
Cost of sales
Research and development
Selling, general and administrative expense
Provision for income tax 4. Compute return on stockholders’ equity for 2011 and 2012 using data from Exhibits 1 and 2.
Exhibit 1 SUNSHINE SYSTEMS, INC. | Summary Consolidated Statement of Income (in millions) | | 2012 | 2011 | 2010 | 2009 | |
In the letter to stockholders as part of the 2012 annual report, President and CEO Scott G. McNealy offered the following remarks:
Fiscal 2012 was clearly a mixed bag for Sun, the industry, and the economy as a whole. Still, we finished with revenue growth of 16 percent—and that’s significant. We believe it’s a good indication that Sun continued to pull away from the pack and gain market share. For that, we owe a debt of gratitude to our employees worldwide, who aggressively brought costs down— even as they continued to bring exciting new products to market.
The statement would not appear to be telling you enough. For example, McNealy says the year was a mixed bag with revenue growth of 16 percent. But what about earnings? You can delve further by examining the income statement in Exhibit 1. Also, for additional analysis of other factors, consolidated balance sheet(s) are presented in Exhibit 2 below.
1. Referring to Exhibit 1, compute the annual percentage change in net income per common share-diluted (second numerical line from the bottom) for 2009-2010, 2010–2011, and 2011–2012. 2. Also in Exhibit 1, compute net income/net revenue (sales) for each of the four years. Begin with 2009. 3. What is the major reason for the change in the answer for Question 2 between 2011 and 2012? To answer this question for each of the two years, take the ratio of the major income statement accounts to net revenues (sales).
Cost of sales
Research and development
Selling, general and administrative expense
Provision for income tax 4. Compute return on stockholders’ equity for 2011 and 2012 using data from Exhibits 1 and 2.
Exhibit 1 SUNSHINE SYSTEMS, INC. | Summary Consolidated Statement of Income (in millions) | | 2012 | 2011 | 2010 | 2009 | |