Observe the net income for both companies. Which company is more profitable?Which company is more profitable using this type of analysis? GMA NETWORK INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEcurrency in philippine pesos, in millions% of change from 20072010200920082007Revenues19.27%13.87%3.56%0.00%Cost of Goods Sold20.49%10.84%3.44%0.00%GROSS PROFIT (Gross Income/Net Revenues)18.45%15.92%3.64%0.00%Selling General & Admin Expenses, Total30.73%18.80%3.51%0.00%Depreciation & Amortization, Total-4.95%10.35%13.57%0.00%Other Operating Expenses30.57%34.11%10.84%0.00%OTHER OPERATING EXPENSES, TOTAL26.41%18.51%5.08%0.00%INCOME FROM OPERATIONS (Operating Income)11.82%13.76%2.45%0.00%Interest Expense83.55%61.47%60.61%0.00%Interest and Investment Income3.90%-22.31%-7.53%0.00%Income (Loss) on Equity Investments315.63%-259.38%-118.75%0.00%Currency Exchange Gains (Loss)-34.21%51.58%101.58%0.00%Other Non-Operating Income (Expenses)-79.91%-68.61%-54.34%0.00%Gain (Loss) on Sale of Assets1837.50%1375.00%3925.00%0.00%Other Unusual Items, Total-100.00%-97.65%-95.29%0.00%NET INCOME BEFORE TAX9.92%11.22%2.06%0.00%Income Tax Expense-14.95%-10.83%0.81%0.00%NET INCOME22.26%22.15%2.67%0.00% ABS-CBN CORP.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEcurrency in philippine pesos, in millionsHorizontal Analysis% of change from 20072010200920082007Revenues60.99%27.79%13.87%0.00%Cost of Sales53.46%35.43%22.96%0.00%GROSS PROFIT (Gross Income/Net Revenues)70.23%18.42%2.73%0.00%Selling General & Admin Expenses, Total60.55%22.08%3.76%0.00%Depreciation & Amortization, Total26.70%20.69%34.08%0.00%Other Operating Expenses75.55%13.80%14.25%0.00%OTHER OPERATING EXPENSES, TOTAL57.64%21.63%7.26%0.00%INCOME FROM OPERATIONS (Operating Income98.53%11.19%-7.46%0.00%Interest Expense-100.28%-74.25%-37.26%0.00%Interest and Investment Income-4.65%-16.62%-19.48%0.00%Income (Loss) on Equity Investments-99.17%-119.17%-57.50%0.00%Currency Exchange Gains (Loss)Other Non-Operating Income (Expenses)Gain (Loss) on Sale of InvestmentsOther Unusual Items10.43%-55.01%-113.21%0.00%373.75%481.20%509.67%0.00%-5390100.00%-100.00%-100.00%0.00%-100.00%-100.00%63.20%0.00%INCOME BEFORE TAX92.49%8.25%7.29%0.00%Income Tax Expense12.29%-30.65%4.62%0.00%NET INCOME154.74%38.45%9.36%0.00%

Net income is defined as gross profit minus any other expenses and costs, as well as any other…

Answered: Observe the net income for both…

Observe the net income for both companies. Which company is more profitable? Which company is more profitable using this type of analysis?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.5.1MBA

See similar textbooks

Similar questions

Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information:     20Y8     20Y7     20Y6     20Y5     20Y4 Net income $273,406 $367,976 $631,176 $884,000 $800,000 Interest expense 616,047 572,003 528,165 495,000 440,000 Income tax expense 31,749 53,560 106,720 160,000 200,000 Total assets (ending balance) 4,417,178 4,124,350 3,732,443 3,338,500 2,750,000 Total stockholders’ equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 1,992,000 1,150,000 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:   20Y4–20Y8 Return on total assets 28%…
Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information:     20Y8     20Y7     20Y6     20Y5     20Y4 Net income $273,406 $367,976 $631,176 $884,000 $800,000 Interest expense 616,047 572,003 528,165 495,000 440,000 Income tax expense 31,749 53,560 106,720 160,000 200,000 Total assets (ending balance) 4,417,178 4,124,350 3,732,443 3,338,500 2,750,000 Total stockholders’ equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 1,992,000 1,150,000 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:   20Y4–20Y8 Return on total assets 28%…
Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information:     20Y8     20Y7     20Y6     20Y5     20Y4 Net income $273,406 $367,976 $631,176 $884,000 $800,000 Interest expense 616,047 572,003 528,165 495,000 440,000 Income tax expense 31,749 53,560 106,720 160,000 200,000 Total assets (ending balance) 4,417,178 4,124,350 3,732,443 3,338,500 2,750,000 Total stockholders’ equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 1,992,000 1,150,000 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:   20Y4–20Y8 Return on total assets 28%…
Comparative Income StatementsConsider the following income statement data from the Ross Company: Current Year Previous Year Sales revenue $525,000 $450,000 Cost of goods sold 336,000 279,000 Selling expenses 105,000 99,000 Administrative expenses 60,000 54,000 Income tax expense 7,800 5,400 Prepare a comparative income statement, showing increases and decreases in dollars and in percentages. Note: Round "Percent Change" answers to one decimal place (ex: 0.2345 = 23.5%). ROSS COMPANYComparative Income Statements Current Year Previous Year Increase(Decrease) PercentChange Sales Revenue Answer Answer Answer Answer Cost of Goods Sold Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Selling Expenses Answer Answer Answer Answer Administrative Expenses Answer Answer Answer Answer Total Answer Answer Answer Answer Income before Income Taxes Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer…
Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $1,078,700 $929,900 $781,400 $667,900 $566,000 Interest expense 366,800 334,800 289,100 220,400 175,500 Income tax expense 345,184 260,372 218,792 173,654 135,840 Total assets (ending balance) 8,226,651 8,779,231 6,276,721 6,620,869 5,020,826 Total stockholders' equity (ending balance) 2,543,681 3,148,667 2,003,133 2,553,135 1,531,881 Average total assets 8,502,941 7,527,976 6,448,795 5,517,391 4,722,930 Average stockholders' equity 2,846,174 2,575,900 2,278,134 2,042,508 1,808,307 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:…
Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $1,078,700 $929,900 $781,400 $667,900 $566,000 Interest expense 366,800 334,800 289,100 220,400 175,500 Income tax expense 345,184 260,372 218,792 173,654 135,840 Total assets (ending balance) 8,226,651 8,779,231 6,276,721 6,620,869 5,020,826 Total stockholders' equity (ending balance) 2,543,681 3,148,667 2,003,133 2,553,135 1,531,881 Average total assets 8,502,941 7,527,976 6,448,795 5,517,391 4,722,930 Average stockholders' equity 2,846,174 2,575,900 2,278,134 2,042,508 1,808,307 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years:…
Solvency and Profitability Trend Analysis Crosby Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $5,571,720 $3,714,480 $2,772,000 $1,848,000 $1,400,000 Interest expense 1,052,060 891,576 768,600 610,000 500,000 Income tax expense 1,225,572 845,222 640,320 441,600 320,000 Total assets (ending balance) 29,378,491 22,598,839 17,120,333 12,588,480 10,152,000 Total stockholders’ equity (ending balance) 18,706,200 13,134,480 9,420,000 6,648,000 4,800,000 Average total assets 25,988,665 19,859,586 14,854,406 11,370,240 8,676,000 Average total stockholders' equity 15,920,340 11,277,240 8,034,000 5,724,000 4,100,000 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years: 20Y4–20Y8…
Selected comparative statement data for Oriole Company are presented below. All balance sheet data are as of December 31. 20222021Net sales$1,165,000 $1,125,000Cost of goods sold705,000 645,000Interest expense20,000 15,000Net income154,945 145,000Accounts receivable145,000 125,000Inventory105,000 100,000Total assets785,000 700,000Preferred stock (6%)205,000 200,000Total stockholders’ equity635,000 525,000 Compute the following ratios for 2022. (Round answers to 1 decimal place, e.g. 1.8 or 2.5%) (a)Profit marginenter the profit margin in percentages %(b)Asset turnoverenter the asset turnover in times times(c)Return on assetsenter the return on assets in percentages %(d)Return on common stockholders’ equityenter the return on common stockholders' equity in percentages %
Selected ratios formulars Unilever 2021 BOPP 2021 ROCE PBIT / net assets * 100 (32,424/39,406 *100 = - 82% 102,154 / 192,758 *100 =53% Net Assets Turnover Revenue / Net Assets 526,912 / 39,406 = 13 times 214,174 / 192,758 = 1 time Gross Profit Margin Gross profit / revenue *100 97,046 / 526,912 *100 18.4% 115,462 / 214,174 * 100 54% Net Profit Before Tax PBT / revenue * 100 (35,005) / 526,912* 100 = -6.6% 104,778 / 214,174* 100 =48.9% Current Ratio Current assets / current liabilities 214,665/341,171 = 0.5 139,104 / 30,368 = 4.5 Quick Ratio Current assets – inventory / current liabilities 214,665-91,627 /341,171 = 0.4 139,104 -13,248/ 30,368 = 4.1 Inventory Days Inventory / cost of sales * 365 days 91,627/ 429,866 *365 = 77 days 13,248 / 101,397 *365 = 47 days Receivable Days Receivables / cost of sales * 365 days 24,515 / 429,866 *365 =20 days 92,860 / 101,397 *365 =334 days Payable Days…
what does the percentages mean in vertical analysis? Year 4 % of Sales Year 3 % of Sales Assets Current Assets Cash $ 40,000 6.67 $ 36,000 6.67 Marketable Securities 20000 3.33 6000 1.11 Accounts Receivable 54000 9.00 46000 8.52 Inventories 135000 22.50 143000 26.48 Prepaid Items 25000 4.17 10000 1.85 Total Assets current 274000 45.67 241000 44.63 Investments 27000 4.50 20000 3.70 plant net 270000 45.00 255000 47.22 Land 29000 4.83 24000 4.44 Total Assets $ 600,000 100.00 $ 540,000 100.00 Liabilities and Stock equity Liabilities Current Liabilities Notes payable $ 17,000 2.83 $ 6,000 1.11 Accounts payable 113800 18.97 100000 18.52 salaries payable 21000 3.50 15000 2.78 Total current liabilities 151800 25.30 121000 22.41 Noncurrent liabilities…
17. Halal Berhad’s comparative financial statements for the years ending 31 December 2020, and 2019, are as follows. Halal Berhad’s common stock market price was RM35 on 31 December 2020 and RM40 on 31 December 2019. Halal Berhad Statement of Profit or Loss and Other Comprehensive Income For the years ended 31 December 2020 and 2019 2020 (RM’000) 2019 (RM’000) Sales 1,200 1,000 Cost of goods sold 500 475 Gross Profit 700 525 Selling expenses 240 200 Administrative expenses 180 150 Total operating expenses 420 350 Income from operations 280 175 Other income 166 225 446 400 Other expense (interest) 66 60 Income before income tax 380 340 Income tax expense 80 60 Net income 300 280 Halal Berhad Statement of Financial Position As at 31 December 2020…
Income statement net sales $51,407.00 cost of products sold $25,076.00 gross profit $26,331.00 marketing, research, administrative exp $15,746.00 Depreciation $758.00 operating income(loss) $9,827.00 Interest expense $477.00 Earnings (loss)before income taxes $9,350.00 Income taxes $2,869.00 Net earnings(loss) $6,481.00 Balance Sheet Assets: Liablilites and Equity: cash and marketable securities $5,469.00 accounts payable $3,617.00 investment securities $423.00 accrued and other liablilties $7,689.00 accounts receivable $4,062.00 taxes payable $2,554.00 inventory $4,400.00 debt due within one year $8,287.00 deffered income taxes $958.00 total current liabilite $22,147.00 prepaid expense and other receivables $1,803.00 long term debt $12,554.00 total current assets $17,115.00 deferrred income taxes…