2016 2015 Net sales $728,450 $699,312 Cost of goods sold $200,000 $224,000 Gross margin $528,450 $475,312...
|
2016 |
2015 |
|
|
Net sales |
$728,450 |
$699,312 |
|
Cost of goods sold |
$200,000 |
$224,000 |
|
Gross margin |
$528,450 |
$475,312 |
|
Selling/administrative costs |
$120,000 |
$125,000 |
|
Operating income |
$408,450 |
$350,312 |
|
Income tax expense |
$77,606 |
$66,559 |
|
Net income |
$330,844 |
$283,753 |
A common size income statement analysis would show what figure for the following company:
|
A. The 2016 change in operating income is $58,138 |
||
|
B. The change in gross margin is $53,138 |
||
|
C. 2016 operating income (as a percent of net sales) is 56.1% |
||
|
D. The percent change in net income is 16.6% |
Homework Answers
Answer-
C. 2016 operating income (as a percent of net sales) is 56.1%
Explanation-
Common size income statement is an income statement in which each line item is expressed as a percentage of the value of revenue or sales. It is also known as vertical analysis. Here each line item in financial statement is represented as a percentage of base value within the statement. In income statement this base value is sale or revenue whereas in balance this value is balance sheet total.
Accordingly, option C. is correct.
2016 operating income ( as a percentage of net sales) is 56.10%.
= ( $408,450 / $728,450 ) * 100
= 56.10 %.
All the remaining options are related with the comparative income statement not the common size income statement. Therefore, option C. is correct one.
Add Answer to:
2016
2015
Net sales
$728,450
$699,312
Cost of goods sold
$200,000
$224,000
Gross margin
$528,450
$475,312...
(in millions) 2016 2015 Net sales 10,400 9,900 Cost of goods sold (5,500) (5,200) Gross profit...
(in millions) 2016 2015 Net sales 10,400 9,900 Cost of goods sold (5,500) (5,200) Gross profit 4,900 4,700 Selling and administrative expenses (2,800) (2,700) Income from operations 2,100 2,000 Interest expense (300) (250) Income before income taxes 1,800 1,750 Income tax expense (420) (400) Net income 1,380 1,350 Smith and Sons, Inc. Balance Sheet 2016 2015 (in millions) Assets Current assets Cash and cash equivalents 550 750 Accounts receivable 900 800 Inventory 850 1,000 Other current assets 400 250 Total...
Exercise 14-2 Operating data for Navarro Corporation are presented below. Net sales Cost of goods sold...
Exercise 14-2 Operating data for Navarro Corporation are presented below. Net sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Net income 2017 $747,500 469,000 120,500 64,000 29,000 65,000 2016 $604,500 392,000 71,000 50,000 20,500 71,000 Prepare a schedule showing a vertical analysis for 2017 and 2016. (Round percentages to 1 decimal place, e.g. 12.3%.) NAVARRO CORPORATION Condensed Income Statements 2017 Percent 2016 Percent Amount Amount $604,500 Net sales $747,500 Cost of goods sold 469,000 392,000 Gross...
0 Income statement 2016 2015 Sales revenues Less: Cost of goods sold Gross profit Less: Operating...
0 Income statement 2016 2015 Sales revenues Less: Cost of goods sold Gross profit Less: Operating expenses Operating income Less: Interest expense Income before income taxes (amounts in thousands) 2017 211,400 $ 182,910 105,000 96,000 106,400 $ 86,910 53,000 46,000 53.400 $ 40,910 5.385 6,459 48,015 $ 34,451 22.617 16. 160 Print Done i Income statement JJUJ 0,435 LESS. Merest expense Income before income taxes 48,015 $ 22,647 25,368 $ 34,451 16,160 Less: Income tax expense Net income 18,291 Additional...
Return on Assets Net Sales Gross Profit Margin Cost of Goods Operating Net Profit Before Tax...
Return on Assets Net Sales Gross Profit Margin Cost of Goods Operating Net Profit Before Tax PI Expense Accounts Receivable Return On Assets + Merchandise Inventory Total Current Assets Asset Turnover Cash Total Assets Fixed Assets Other Current Assets Use the charts on the following page to calculate Net Profit Margin % for each scenario: Scenario 1 Scenario 2 Income Statement Income Statement Sales Sales Gross Sales $200,000 Gross Sales $100,000 Promotional Allowances $25,000 Promotional Allowances $15,000 Customer Returns -$15,000...
Quick Ratio Smith and Sons, Inc. Income Statement (in millions) 2016 2015 Net sales 10,150 9,650 Cost of goods sold (5,...
Quick Ratio Smith and Sons, Inc. Income Statement (in millions) 2016 2015 Net sales 10,150 9,650 Cost of goods sold (5,500) (5,200) Gross profit 4,650 4,450 Selling and administrative expenses (2,800) (2.700) Income from operations 1,850 1.750 Interest expense (300) (250) Income before income taxes 1,550 1,500 Income tax expense (420) (400) Net income 1,130 1,100 Smith and Sons, Inc. Balance Sheet (in millions) 2016 2015 Assets Current assets Cash and cash equivalents 300 500 Accounts receivable 900 800 Inventory...
2015 2016 182,910 96,000 Sales revenues Less: Cost of goods sold Gross profit Less: Operating expenses...
2015 2016 182,910 96,000 Sales revenues Less: Cost of goods sold Gross profit Less: Operating expenses Operating income 2017 211,400 $ 105,000 106,400 $ 53,000 53,400 $ 5,385 48,015 $ 22.647 25,368 $ 86,910 46,000 40,910 Less: Interest expense 6,459 Income before income taxes 34,451 16,160 Less: Income tax expense Net income 18,291 Print Done i Income statement UJOJ 0,15 LESS. IMETEST Experise Income before income taxes 48,015 $ 22,647 34,451 16,160 Less: Income tax expense 25,368 $ 18,291 Net...
*Exercise 14-2 Operating data for Navarro Corporation are presented below. 2017 2016 Net sales Cost of...
*Exercise 14-2 Operating data for Navarro Corporation are presented below. 2017 2016 Net sales Cost of goods sold Selling expenses Administrative expenses $ 754,000 469,500 124,500 65,000 30,000 65,000 $ 601,500 389,500 67,500 52,000 25,500 67,000 Income tax expense Net income Prepare a schedule showing a vertical analysis for 2017 and 2016. (Round answers to 1 decimal place, e.g. 48.5%.) NAVARRO CORPORATION Condensed Income Statements For the Years Ended December 31 2017 2016 Amount Percent Amount Percent Net sales $...
Sales Cost of goods sold Accounts receivable 2019 2018 2017 2016 $ 620,481 $ 408, 211...
Sales Cost of goods sold Accounts receivable 2019 2018 2017 2016 $ 620,481 $ 408, 211 $ 331,879 $ 225,768 $ 318,945 209,888 172,408 1 17,092 30,031 23,799 22,734 13,230 2015 163,600 83,436 11,190 Compute trend percents for the above accounts, using 2015 as the base year. Trend Percent for Net Sales: | Choose Denominator: Choose Numerator: Trend percent 2019: 2018: 2017: 2016: Trend Percent for Cost of Goods Sold: 1 Choose Denominator: Choose Numerator: 1 = Trend percent 2019:...
Sales revenue Cost of goods sold Gross profit Selling and administrative expenses Operating income Interest expense...
Sales revenue Cost of goods sold Gross profit Selling and administrative expenses Operating income Interest expense Income before tax Income tax expense Net income 2018 R 70,000 42,000 R 28,000 20,000 R8,000 2,000 R6,000 2,000 R 4,000 2017 R 60,000 30,000 R 30,000 14,000 R16,000 2,000 R14,000 3,000 R11,000 Required: 1. Prepare common-size comparative income statements for the two years for Beach Motors (Pty) Ltd (11) 2. What observations can you make about the common-size statements? List at least four...
Operating income equals: A) Gross margin - selling expenses B) Sales revenue - cost of goods...
Operating income equals: A) Gross margin - selling expenses B) Sales revenue - cost of goods sold C) Sales revenue - selling and administrative expenses D) Sales revenue - cost of goods sold - selling and administrative expense
(in millions) 2016 2015 Net sales 10,400 9,900 Cost of goods sold (5,500) (5,200) Gross profit 4,900 4,700 Selling and administrative expenses (2,800) (2,700) Income from operations 2,100 2,000 Interest expense (300) (250) Income before income taxes 1,800 1,750 Income tax expense (420) (400) Net income 1,380 1,350 Smith and Sons, Inc. Balance Sheet 2016 2015 (in millions) Assets Current assets Cash and cash equivalents 550 750 Accounts receivable 900 800 Inventory 850 1,000 Other current assets 400 250 Total...
Exercise 14-2 Operating data for Navarro Corporation are presented below. Net sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Net income 2017 $747,500 469,000 120,500 64,000 29,000 65,000 2016 $604,500 392,000 71,000 50,000 20,500 71,000 Prepare a schedule showing a vertical analysis for 2017 and 2016. (Round percentages to 1 decimal place, e.g. 12.3%.) NAVARRO CORPORATION Condensed Income Statements 2017 Percent 2016 Percent Amount Amount $604,500 Net sales $747,500 Cost of goods sold 469,000 392,000 Gross...
0 Income statement 2016 2015 Sales revenues Less: Cost of goods sold Gross profit Less: Operating expenses Operating income Less: Interest expense Income before income taxes (amounts in thousands) 2017 211,400 $ 182,910 105,000 96,000 106,400 $ 86,910 53,000 46,000 53.400 $ 40,910 5.385 6,459 48,015 $ 34,451 22.617 16. 160 Print Done i Income statement JJUJ 0,435 LESS. Merest expense Income before income taxes 48,015 $ 22,647 25,368 $ 34,451 16,160 Less: Income tax expense Net income 18,291 Additional...
Return on Assets Net Sales Gross Profit Margin Cost of Goods Operating Net Profit Before Tax PI Expense Accounts Receivable Return On Assets + Merchandise Inventory Total Current Assets Asset Turnover Cash Total Assets Fixed Assets Other Current Assets Use the charts on the following page to calculate Net Profit Margin % for each scenario: Scenario 1 Scenario 2 Income Statement Income Statement Sales Sales Gross Sales $200,000 Gross Sales $100,000 Promotional Allowances $25,000 Promotional Allowances $15,000 Customer Returns -$15,000...
Quick Ratio Smith and Sons, Inc. Income Statement (in millions) 2016 2015 Net sales 10,150 9,650 Cost of goods sold (5,500) (5,200) Gross profit 4,650 4,450 Selling and administrative expenses (2,800) (2.700) Income from operations 1,850 1.750 Interest expense (300) (250) Income before income taxes 1,550 1,500 Income tax expense (420) (400) Net income 1,130 1,100 Smith and Sons, Inc. Balance Sheet (in millions) 2016 2015 Assets Current assets Cash and cash equivalents 300 500 Accounts receivable 900 800 Inventory...
2015 2016 182,910 96,000 Sales revenues Less: Cost of goods sold Gross profit Less: Operating expenses Operating income 2017 211,400 $ 105,000 106,400 $ 53,000 53,400 $ 5,385 48,015 $ 22.647 25,368 $ 86,910 46,000 40,910 Less: Interest expense 6,459 Income before income taxes 34,451 16,160 Less: Income tax expense Net income 18,291 Print Done i Income statement UJOJ 0,15 LESS. IMETEST Experise Income before income taxes 48,015 $ 22,647 34,451 16,160 Less: Income tax expense 25,368 $ 18,291 Net...
*Exercise 14-2 Operating data for Navarro Corporation are presented below. 2017 2016 Net sales Cost of goods sold Selling expenses Administrative expenses $ 754,000 469,500 124,500 65,000 30,000 65,000 $ 601,500 389,500 67,500 52,000 25,500 67,000 Income tax expense Net income Prepare a schedule showing a vertical analysis for 2017 and 2016. (Round answers to 1 decimal place, e.g. 48.5%.) NAVARRO CORPORATION Condensed Income Statements For the Years Ended December 31 2017 2016 Amount Percent Amount Percent Net sales $...
Sales Cost of goods sold Accounts receivable 2019 2018 2017 2016 $ 620,481 $ 408, 211 $ 331,879 $ 225,768 $ 318,945 209,888 172,408 1 17,092 30,031 23,799 22,734 13,230 2015 163,600 83,436 11,190 Compute trend percents for the above accounts, using 2015 as the base year. Trend Percent for Net Sales: | Choose Denominator: Choose Numerator: Trend percent 2019: 2018: 2017: 2016: Trend Percent for Cost of Goods Sold: 1 Choose Denominator: Choose Numerator: 1 = Trend percent 2019:...
Sales revenue Cost of goods sold Gross profit Selling and administrative expenses Operating income Interest expense Income before tax Income tax expense Net income 2018 R 70,000 42,000 R 28,000 20,000 R8,000 2,000 R6,000 2,000 R 4,000 2017 R 60,000 30,000 R 30,000 14,000 R16,000 2,000 R14,000 3,000 R11,000 Required: 1. Prepare common-size comparative income statements for the two years for Beach Motors (Pty) Ltd (11) 2. What observations can you make about the common-size statements? List at least four...
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