Balance Sheet and Income Statement Commentary Essay

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Balance Sheet and Income Statement Commentary
Belinda Greer
March 24, 2012
Murali Ramachandran

Balance Sheet and Income Statement Commentary
Balance sheets and income statements are a snapshot of a company’s stability and financial situation. Combined the statements show the income, expenses, and stockholder’s equity in the company. These statements are often analyzed by financial institutions when a company comes to them needing a loan. Stockholders and other investors also look at these statements to make sure their investment will return a profit for them. This paper will look at four different companies and their balance sheets and income statements. The companies are Eastman Chemical Company, Covenant Transportation
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It also showed an operating income or losses of 18.45% that showed a negative balance for nonrecurring expenses. The company showed an increase of 58.90% in preferred stock (Yahoo Finance, 2012). From reviewing the balance sheet and income statement, Eastman is a solid company to invest in.
Covenant Transportation Group, Inc. offers transportation and brokerage services within the United States. The company provides long haul service, dedicated runs, solo drivers, and temperature controlled services to their customers. They also offer freight brokerage services to other transportation companies such as third party logistics providers. In June 2011 the company operated over 3,049 tractors and 7,133 trailers. Covenant was founded in 1994 and the headquarters to the company is located in Chattanooga, Tennessee (Yahoo Finance, 2012). Covenant’s balance sheet and income statement is a comparison of the years 2010, 2009, and 2008, and shows the company as struggling due to the current economy situation. The company’s total current assets decreased by 10.50% and include cash, short-term investment as well as inventory. The company had an increase of 9.23% in their total liabilities that was due to increases in their long-term debt as well as other liabilities. The net tangible assets for Covenant showed an increase of 7.24% over the twelve-month period. The income statement showed a decrease of 8.9% in the company’s gross profit during 2011. It also showed
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