Assignment: Income Statement Analysis
Line Item
Revenue (aka Sales, Turnover)
Cost of Goods Sold/Cost of Sales
Salary Expense
Selling, General and Administrative Expense
Gross Profit
Operating Profit
Net Profit
Ratio
o Gross Margin (%)
o Net Margin (%)
o Salary Expense as % of Sales
o Return on Sales
o Return on Equity
o Return on Assets
o Earnings Per Share (EPS)
o EBITDA
• What does this line item or ratio measure and why is it an important item for Management to understand this number?
• Identify the past 4 years of amounts for your line item or ratio (Note: this will require you to track down additional historical Income Statements to get the older data). Share this data with the class using a data table or chart.
• Answer the following questions:
a. What is the trend for this line item or ratio?
b. Has the line item or ratio amount increased or decreased?
c. Is this a "good" thing or a "bad" thing? For this company?
d. What might management do to improve this line item or ratio?
Format your assignment according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the assignment, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.