Create a common size comparative income statement

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Reference no: EM131295469

Calculations & Analysis Component

1. Create a comparative balance sheet by calculating the dollar change and percent change.

2. Using the figures provided on the balance sheet, calculate a) Current ratio b) Debt ratio c) Equity ratiofor both years.

3. Create a common size comparative income statement by dividing every item on the income statement by Revenues for both years.

4. Using the figures provided on the income statement, calculate a) Gross margin ratio, b) Profit margin ratio.

5. In which year was the company more liquid and why?

6. Was the company financed by more debt or more equity in 2014 and 2015 and why?

7. What trends do you see on the balance sheet?

8. In which year did the company retain a higher gross margin? Why do you think this was the case? (lower or higher cost of sales as % of revenues?).

9. In which year did the company retain a higher profit margin? Why do you think that was the case? (lower or higher expenses?)

Reference no: EM131295469

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