How is net income different from comprehensive income

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Reference no: EM131415377

When luxury car maker BMW recently released earnings, the Wall Street Journal reported that it compared poorly to the prior year for a number of reasons, including:

* rising raw material costs

* strength of the euro

* a large gain booked during the year

* rising costs to introduce new models

These factors contributed to a 38 percent drop in quarterly income despite a 2.9 percent increase in sales.

REQUIRED:

a. Discuss where the above reasons would be represented in the financial statements.

b. Which of the above reasons might be considered permanent and recurring?

c. How is net income different from comprehensive income?

d. On the day of the earnings announcement, BMW's stock price rose 1 percent. What other factors would an analyst review in addition to the earnings?

Reference no: EM131415377

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