Describe the changes of the Comparative Income Statement Analysis in 300 words or more.
Horizontal Analysis Income Statement
As Reported Annual Income Statement | |||||||
Report Date | 2016 | 2017 | 2018 | Increase/ Decrease | % Change | Increase/ Decrease | % Change |
Scale | Thousand | Thousand | Thousand | ||||
Net Sales | $ 65,017,000 | $ 68,619,000 | $ 71,309,000 | $ 3,602,000 | 5.54% | $ 2,690,000 | 3.92% |
Cost of Sales | $ 42,553,000 | $ 45,210,000 | $ 48,401,000 | $ 2,657,000 | 6.24% | $ 3,191,000 | 7.06% |
Gross Margin | $ 22,464,000 | $ 23,409,000 | $ 22,908,000 | $ 945,000 | 4.21% | $ (501,000) | -2.14% |
Selling General & Administrative Expenses | $ 15,129,000 | $ 15,376,000 | $ 17,413,000 | $ 247,000 | 1.63% | $ 2,037,000 | 13.25% |
Depreciation & Amortization | $ 1,489,000 | $ 1,447,000 | $ 1,477,000 | $ (42,000) | -2.82% | $ 30,000 | 2.07% |
Operating Income/ (Loss) | $ 5,846,000 | $ 6,586,000 | $ 4,018,000 | $ 740,000 | 12.66% | $ (2,568,000) | -38.99% |
Interest Income (Expenses), net | $ (645,000) | $ (633,000) | $ (624,000) | $ 12,000 | -1.86% | $ 9,000 | -1.42% |
Loss of extinguishment of debt | $ - | $ (464,000) | $ - | $ (464,000) | $ 464,000 | -100.00% | |
Pre-tax earnings (losses) | $ 5,201,000 | $ 5,489,000 | $ 3,394,000 | $ 288,000 | 5.54% | $ (2,095,000) | -38.17% |
Income Tax provision | $ 2,108,000 | $ 2,042,000 | $ 1,080,000 | $ (66,000) | -3.13% | $ (962,000) | -47.11% |
Net Earnings | $ 3,093,000 | $ 3,447,000 | $ 2,314,000 | $ 354,000 | 11.45% | $ (1,133,000) | -32.87% |
Shares in Millions, $ in Millions | 2016 | 2017 | 2018 | Increase/ Decrease | % Change | Increase/ Decrease | % Change |
Income Statement | |||||||
Net Sales | $ 94,595 | $ 100,904 | $ 108,203 | $ 6,309 | 6.67% | $ 7,299 | 7.23% |
Cost of Sales | $ 62,282 | $ 66,548 | $ 71,043 | $ 4,266 | 6.85% | $ 4,495 | 6.75% |
Gross Profit | $ 32,313 | $ 34,356 | $ 37,160 | $ 2,043 | 6.32% | $ 2,804 | 8.16% |
Operating Expenses: | |||||||
Selling General & Administrative Expenses | $ 17,132 | $ 17,864 | $ 19,513 | $ 732 | 4.27% | $ 1,649 | 9.23% |
Depreciation & Amortization | $ 1,754 | $ 1,811 | $ 1,870 | $ 57 | 3.25% | $ 59 | 3.26% |
Impairment loss | $ - | $ - | $ 247 | $ - | $ 247 | ||
Total operating expenses | $ 18,886 | $ 19,675 | $ 21,630 | $ 789 | 4.18% | $ 1,955 | 9.94% |
Operating Income | $ 13,427 | $ 14,681 | $ 15,530 | $ 1,254 | 9.34% | $ 849 | 5.78% |
Interest and other (income) expenses: | |||||||
Interest and Investment Income | $ (36) | $ (74) | $ (93) | $ (38) | 105.56% | $ (19) | 25.68% |
Interest Expenses | $ 972 | $ 1,057 | $ 1,051 | $ 85 | 8.74% | $ (6) | -0.57% |
Other | $ - | $ - | $ 16 | $ - | $ 16 | ||
Interest and other, net | $ 936 | $ 983 | $ 974 | $ 47 | 5.02% | $ (9) | -0.92% |
Earnings before provision for income taxes | $ 12,491 | $ 13,698 | $ 14,556 | $ 1,207 | 9.66% | $ 858 | 6.26% |
Provision of Income Taxes | $ 4,534 | $ 5,068 | $ 3,435 | $ 534 | 11.78% | $ (1,633) | -32.22% |
Net Earnings | $ 7,957 | $ 8,630 | $ 11,121 | $ 673 | 8.46% | $ 2,491 | 28.86% |
Comparative financial statements are those statements that enable intra-firm and inter-firm comparisons of financial statements over a period of time. In other words, these statements help the accounting users to evaluate and assess the financial progress in the relative terms. These statements express the absolute figures, absolute change, and the percentage change in the financial items over a period of time. Comparative Financial Statements present the financial data in such a manner that is easily understandable and can be analyzed without any ambiguity. If the accounting policies and practices for the treatment of the items are same over the period of study, only then the Comparative Financial Statements enable meaningful comparisons.
Percentage = Absolute Change/Base Year *100
Analysis- Company 1
1. Sales of the company have increased by 3.92% during the year 2018 whereas the cost of goods sold has also increased more than sales i.e. 7.06%. From this, we can infer that the company has not followed an efficient sales strategy consequent of which the gross profit of the company has decreased by 2.14% compared to the previous year 2017 where gross profit increased by 4.21%.
2. In 2018, operating expenses have increased at a higher rate thus resulting in operating losses, i.e. operating income decreased by -38.99% as compared to 2017 where operating income increased by 12.66%.
3.Net earnings have also decreased by -32.87% during 2018 as compared to 2017 where Net earnings increased by 11.45%. This indicates the deterioration in the operating efficiency of the company.
Analysis- Company 2
1. Sales of the company have increased by 7.23% during the year 2018 whereas the cost of goods sold has also increased but at a lesser rate 0f 6.75%. From this, we can infer that the company has followed an efficient sales strategy consequent of which the gross profit of the company has increased by 8.16% compared to the previous year 2017.
2. In 2018, operating expenses have also increased at 9.94% and operating profit has increased at a lesser rate than the rate of operating expenses.
3.Net earnings has also increased by 28.86% during 2018 as compared to 2017 where Net earnings increased by 8.46%. This indicates the improvement in the operating efficiency of the company.
Describe the changes of the Comparative Income Statement Analysis in 300 words or more. Horizontal Analysis...
Describe the changes of the Comparative Income Statement Analysis in 300 words or more. Horizontal Analysis Income Statement As Reported Annual Income Statement Report Date 2016 2017 2018 Increase/ Decrease % Change Increase/ Decrease % Change Scale Thousand Thousand Thousand Net Sales $ 65,017,000 $ 68,619,000 $ 71,309,000 $ 3,602,000 5.54% $ 2,690,000 3.92% Cost of Sales $ 42,553,000 $ 45,210,000 $ 48,401,000 $ 2,657,000 6.24% $ 3,191,000 7.06% Gross Margin $ 22,464,000 $ 23,409,000 $ 22,908,000 $ 945,000 4.21%...
Horizontal Analysis of the Income Statement Income statement
data for Winthrop Company for two recent years ended December 31,
are as follows: Current Year Sales Cost of goods sold Gross profit
$665,600 567,000 Previous Year $520,000 450,000 $98,600 $70,000
Selling expenses$29,500 Administrative expenses 26,460 $25,000
21,000 $ 46,000 Total operating expenses$55,960 Income before
income tax$42,640 $ 24,000 Income tax expenses 17,1009,600 Net
income$ 25,540$ 14,400
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent...
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales Cost of goods sold Gross profit Selling expenses Administrative expenses $541,200 456,000 585,200 $440,000 380,000 $23,730 $60,000 $21,000 18,000 $39,000 21,780 Total operating expenses $45,510 539,690 15,900 Income before income tax Income tax expenses $21,000 8,400 Net income $23,790 $12,600 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $512,000 $400,000 Cost of goods sold 428,400 340,000 Gross profit $83,600 $60,000 Selling expenses $24,780 $21,000 Administrative expenses 22,680 18,000 Total operating expenses $47,460 $39,000 Income before income tax $36,140 $21,000 Income tax expenses 14,500 8,400 Net income $21,640 $12,600 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $496,100 $410,000 Cost of goods sold 401,200 340,000 Gross profit $94,900 $70,000 Selling expenses $26,640 $24,000 Administrative expenses 23,800 20,000 Total operating expenses $50,440 $44,000 Income before income tax $44,460 $26,000 Income tax expenses 17,800 10,400 Net income $26,660 $15,600 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $624,000 $480,000 Cost of goods sold 512,000 400,000 Gross profit $112,000 $80,000 Selling expenses $33,600 $28,000 Administrative expenses 30,720 24,000 Total operating expenses $64,320 $52,000 Income before income tax $47,680 $28,000 Income tax expenses 19,100 11,200 Net income $28,580 $16,800 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...
Horizontal Analysis of the Income Statement
Income statement data for Boone Company for two recent years
ended December 31, are as follows:
Horizontal Analysis of the Income Statement Income statement data for Boone Company for two recent years ended December 31, are as follows Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses Net income Current Year $825,500 706,800 $118,700 $35,100 31,250 $66,350 $52,350 20,900 $31,450 Previous Year...
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows Current Year $799,800 685,800 $114,000 $34,510 30,480 $64,990 $49,010 19,600 $29,410 Previous Year $620,000 540,000 $80,000 $29,000 24,000 $53,000 $27,000 10,800 $16,200 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses Net income a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $460,800 375,000 $360,000 300,000 Cost of goods sold Gross profit $85,800 $60,000 Selling expenses $24,780 $21,000 Administrative expenses 22,680 18,000 Total operating expenses $47,460 $39,000 Income before income tax $21,000 $38,340 15,300 Income tax expenses 8,400 Net income $23,040 $12,600 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $878,400 $720,000 Cost of goods sold 725,900 610,000 Gross profit $152,500 $110,000 Selling expenses $42,560 $38,000 Administrative expenses 38,400 32,000 Total operating expenses $80,960 $70,000 Income before income tax $71,540 $40,000 Income tax expenses 28,600 16,000 Net income $42,940 $24,000 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...