Analyze the common size income statements

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Reference no: EM13495377

1. The following calculations have been made for ABC Company - CALCULATIONS REQUIRED

 

Growth rate

2013 to 2014

Net sales 10.5%

Total accounts receivable 21.3%

Allowance for doubtful accounts 2.6%

 

Allowance for doubtful accounts as a

percentage of total accounts receivable

2014 3.8%

2013 5.4%

Analyze the accounts receivable and allowance for doubtful accounts changes and provide plausible explanations for the results.

 

2. Analyze the common size income statements below - CALCULATIONS REQUIRED


2014

2013

Net sales

100%

100%

Cost of goods sold

55

60

Gross profit

45

40

Operating expenses



Research and development

14

20

Selling, general and administrative

5

9

Restructuring, asset impairments and other charges

1

8

Total operating expenses

20

37

Income from operations

25

3

Interest expense

1

1

Income before income taxes

24

2

Provision for income taxes

3

1

Net income

21%

1%


Sales revenue increase, 2013 to 2014

80%



 

Reference no: EM13495377

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