Common sizeNet salesCost of salesGross profitSelling, general and administrativeexpensesOther (income) expense, netOperating profitInterest expense, net.Income before income taxesProvision for income taxesNet income including interestsLess: Net income attributable to interestsNet income attributable to DawningCompany2011100.00 100.0040.8642.6957.31 59.1434.41 34.79(0.05)22.9520100.3122.647.3815.260.3822.042009 2008 2007 20067.1814.86100.00 100.0041.23 41.2058.7758.800.721.9322.42 23.5934.46 34.84 35.703.6120.350.750.5023.08 19.60100.00 100.0040.41 41.0859.5958.927.44 6.3115.64 13.294.0419.841.2518.5935.215.4918.22Required: analyse and interpret the Common-Size Income statement on the companyperformance for the period 2006 to 20111.3916.835.50 5.3013.08 11.530.740.710.69 0.520.49 0.4714.53 14.15 14.95 12.77 12.60 11.06

A Common-Size Income Statement is a financial statement that expresses each line item as a…

Common size Net sales Cost of sales Gross profit Selling, general and administrative expenses Other (income) expense, net Operating profit Interest expense, net. Income before income taxes Provision for income taxes Net income including interests Less: Net income attributable to interests Net income attributable to Dawning Company 2011 0.31 22.64 2010 100.00 100.00 100.00 100.00 100.00 100.00 42.69 40.86 40.41 41.08 41.23 41.20 57.31 59.14 58.77 58.80 59.59 58.92 34.41 34.79 34.46 34.84 (0.05) 0.72 3.61 22.95 23.59 20.35 0.74 14.53 1.93 22.42 0.38 22.04 7.38 7.18 15.26 14.86 2009 2008 2007 2006 0.50 0.75 23.08 19.60 7.44 6.31 15.64 13.29 0.69 0.52 0.71 14.15 14.95 12.77 35.70 4.04 19.84 1.25 18.59 35.21 5.49 18.22 Required: analyse and interpret the Common-Size Income statement on the company performance for the period 2006 to 2011 1.39 16.83 5.50 5.30 13.08 11.53 0.49 0.47 12.60 11.06

Common size Net sales Cost of sales Gross profit Selling, general and administrative expenses Other (income) expense, net Operating profit Interest expense, net. Income before income taxes Provision for income taxes Net income including interests Less: Net income attributable to interests Net income attributable to Dawning Company 2011 0.31 22.64 2010 100.00 100.00 100.00 100.00 100.00 100.00 42.69 40.86 40.41 41.08 41.23 41.20 57.31 59.14 58.77 58.80 59.59 58.92 34.41 34.79 34.46 34.84 (0.05) 0.72 3.61 22.95 23.59 20.35 0.74 14.53 1.93 22.42 0.38 22.04 7.38 7.18 15.26 14.86 2009 2008 2007 2006 0.50 0.75 23.08 19.60 7.44 6.31 15.64 13.29 0.69 0.52 0.71 14.15 14.95 12.77 35.70 4.04 19.84 1.25 18.59 35.21 5.49 18.22 Required: analyse and interpret the Common-Size Income statement on the company performance for the period 2006 to 2011 1.39 16.83 5.50 5.30 13.08 11.53 0.49 0.47 12.60 11.06

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 32MCQ

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