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 |
Field of study:
