Question

Income Statement
	12/31/2019	12/31/2018
Total Revenue	22428000	21965000	2.11%
Cost of Revenue	16445000	15907000	3.38%
Gross Profit	5983000	6058000	-1.24%
Operating Expense	3026000	2852000	6.10%
Operating Income	2957000	3206000	-7.77%
Net Non Operating Interest Income Expense	8000	-24000	-133.33%
Other Income Expense	-8000	-18000	-55.56%
Tax Provision	657000	699000	-6.01%
Total Expenses	19471000	18759000	3.80%
Interest Income	90000	69000	30.43%
Interest Expense	82000	93000	-11.83%
EBIT	3039000	3257000	-6.69%
Tax Rate for Calcs	0	0
Tax Effect of Ususual Items	0	0
Assets	25895000	26243000	-1.33%
Liabilities and Stockholers equity	25895000	26243000	-1.33%

Looking at the Income statement sheet what assumptions can be made about this company.

Answer 1

Following assumptions can be made on seeing the income statement of the company.

1)The cost of revenue to total revenue compared to previous has increased from 72.42% in 2018 to 73.32% in 2019.So the gross profit of the company has been reduced compared to previous year .On seeing above figures we can assume that the company's cost of expenditure has been increasing though the revenue has not increased.

2)Operating expenditure also increased compared to previous year.The company has to concentrate on decreasing expenditure and concentrate on increasing the expenditure.

3)The EBIT of the company has decreased due to the above increase in expenditure compared to previous year.

4)There were no increase in assets and liabilites of the company.Based on above we can conclude that company was not interested in expanding the company.