Ashford 4: - Week 3 - Discussion 2

 

Your initial discussion thread is due on Day 3 (Thursday) and you have until Day 7 (Monday) to respond to your classmates. Your grade will reflect both the quality of your initial post and the depth of your responses. Reference the Discussion Forum Grading Rubric for guidance on how your discussion will be evaluated.

 

     

Analyzing   an Income Statement


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

 Respond to at least two of your classmates’ posts. 

  

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