Accounting Analyzing Income Statement Discussion

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avynzz2019

Business Finance

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Income Statement

Referencing this week’s readings and lecture, address the following:

What are the two causes of an increasing or decreasing sales number?

Discuss all the reasons that might explain an increase or decrease in gross profit


Income statements are presented in the table below for the Elf Corporation for the years ending December 31, 2010, 2009, and 2008. Write a one-paragraph analysis of Elf Corporation’s profit performance for the period. Create a common-sized income statement for the three years. What conclusions can you draw from the different parts of the statement? What are the causes and effects of Elf's performance for those three years?

Elf Corporation Income Statements for the Years Ending December 31

(in millions) 2010 2009 2008

Sales $700 $650 $550

Cost of goods sold 350 325 275

Gross profit 350 325 275

Operating Expenses:

Administrative 100 100 100

Advertising and marketing 50 75 75

Operating profit $200 $150 $100

Interest expense 70 50 30

Earnings before tax $130 $100 $ 70

Tax expense (50%) 65 50 35

Net income $ 65 $50 $ 35


Explanation & Answer:
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Hi, kindly find attached

Running head: ANALYZING INCOME STATEMENT

Analyzing Income Statement
Student’s Name
Institution
Date

1

ANALYZING INCOME STATEMENT

2

Analyzing income statement
Discuss all the reasons that might explain an increase or decrease in gross profit
A raise or a reduction in gross profit in any company is reasonable. Sometimes a firm could
have a declining gross profit edge but have an increase in the total loss this can be attained by
either lo...


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