CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Common-Size Analysis Trend Analysis (In millions, except share and per share amounts) 2019-2020 2021 2020 2020-2021 Fiscal Years Ended December 31, (Percent of Net Sales) 2019 $ Change % Change $ Change % Change 2021 2020 5,750 $ 4,440 $ 6,095 Net sales 3,840 3,132 3,840 Cost of Goods Sold GROSS PROFIT 1,150 777 1,035 Stores and Distribution Expense 460 333 575 Selling, General and Administrative Expense 12 22 35 Other Operating Expense (Income), Net OPERATING INCOME (1) (4) (2) Interest Income (Expense) OPERATING INCOME BEFORE TAXES 115 78 230 Income Tax Expense NET INCOME EARNINGS PER SHARE Calculate the following for: 2021 2020 Formulas/Links: n/a n/a Gross Profit Margin (percentage) Net Profit Margin (percentage) n/a n/a Select the possible explanations for the change in the Gross Profit Margin from 2020 to 2021:

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Common-Size Analysis Trend Analysis (In millions, except share and per share amounts) 2019-2020 2021 2020 2020-2021 Fiscal Years Ended December 31, (Percent of Net Sales) 2019 $ Change % Change $ Change % Change 2021 2020 5,750 $ 4,440 $ 6,095 Net sales 3,840 3,132 3,840 Cost of Goods Sold GROSS PROFIT 1,150 777 1,035 Stores and Distribution Expense 460 333 575 Selling, General and Administrative Expense 12 22 35 Other Operating Expense (Income), Net OPERATING INCOME (1) (4) (2) Interest Income (Expense) OPERATING INCOME BEFORE TAXES 115 78 230 Income Tax Expense NET INCOME EARNINGS PER SHARE Calculate the following for: 2021 2020 Formulas/Links: n/a n/a Gross Profit Margin (percentage) Net Profit Margin (percentage) n/a n/a Select the possible explanations for the change in the Gross Profit Margin from 2020 to 2021:

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 74E

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Income Statement and Retained Earnings Huff Company presents the following items derived from its December 31, 2019, adjusted trial balance: The following information is also available for 2019 and is not reflected in the preceding accounts: 1. The common stock has been outstanding all year. A cash dividend of 1.28 per share was declared and paid. 2. Land was sold at a pretax gain of 6,300. 3. Division X (a major component of the company) was sold at a pretax gain of 4,700. It had incurred a 9,500 pretax operating loss during 2019. 4. A tornado, which is an unusual event in the area, caused a 5,400 pretax loss. 5. The income tax rate on all items of income is 30%. 6. The average shareholders equity is 90,000. Required: 1. Prepare a 2019 multiple-step income statement for Huff. 2. Prepare a 2019 retained earnings statement. 3. Compute the 2019 return on common equity (Net Income 4 Average Shareholders Equity).
Profitability Ratios Katrina Corp. is a publicly traded company on a large stock exchange. Katrinas financial statement for 2019 and 2018 included the following data: Required: Calculate Katrinas earnings per share as it would be reported on the 2019 income statement.
Ratio Analysis Consider the following information taken from the stockholders equity section: How do you interpret the companys payout and profitability performance? Required: 1. Calculate the following for 2020. (Note. Round answers to two decimal places.) 2. CONCEPTUAL CONNECTION Assume 2019 ratios were: and the current year industry averages are: How do you interpret the companys payout and profitability performance?
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