Question 2The comparative income statement of Zalora Company appears below:Zalora CompanyComparative Statements of Comprehensive Incomefor the years ended 31 December2020 (RM)2019 (RM)Net sales750.000650,000Less: ExpensesCost of goods soldSelling expensesInterest expense388,000330,000108,00096,00010,00010,000Income tax expense18,0006,000Other expense2,000Add: Other income2,000Net income224,000210,000Instructions(a) Prepare a horizontal analysis of the Statements of Comprehensive Income datafor Zalora Company using 2019 as a base.(b) Prepare a vertical analysis of the Statements of Comprehensive Income data forZalora Company for 2019 & 2020.(c) State whether 2020 was a good year or a bad year and give a reason.

Horizontal Analysis: Horizontal analysis is a technique of financial statement analysis, which shows…

Question 2 The comparative income statement of Zalora Company appears below: Zalora Company Comparative Statements of Comprehensive Income for the years ended 31 December 2020 (RM) 2019 (RM) Net sales 750,000 650,000 Less: Expenses Cost of goods sold Selling expenses Interest expense 388,000 330,000 108,000 96,000 10,000 10,000

Question 2 The comparative income statement of Zalora Company appears below: Zalora Company Comparative Statements of Comprehensive Income for the years ended 31 December 2020 (RM) 2019 (RM) Net sales 750,000 650,000 Less: Expenses Cost of goods sold Selling expenses Interest expense 388,000 330,000 108,000 96,000 10,000 10,000

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter17: Financial Statement Analysis

Section: Chapter Questions

Problem 17.1EX

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Return on assets The following data (in millions) were adapted from recent financial statements of Tootsie Roll Industries Inc. (TR): The percent a company adds to its cost of sales to determine selling price is called a markup. What is Tootsie Roll’s markup percent? Round to one decimal place.
Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of goods sold 660.0 Gross profit 135.0 Selling expenses 73.5 EBITDA 61.5 Depreciation expenses 12.0 Earnings before interest and taxes (EBIT) 49.5 Interest expenses 4.5 Earnings before taxes (EBT) 45.0 Taxes (40%) 18.0 Net income 27.0 a. Calculate the ratios you think would be useful in this analysis. b. Construct a DuPont equation, and compare the companys ratios to the industry average ratios. c. Do the balance-sheet accounts or the income statement figures seem to be primarily responsible for the low profits? d. Which specific accounts seem to be most out of line relative to other firms in the industry? e. If the firm had a pronounced seasonal sales pattern or if it grew rapidly during the year, how might that affect the validity of your ratio analysis? How might you correct for such potential problems?
Return on assets The financial statements of The Hershey Company (HSY) are shown in Exhibits 6 through 9 of this chapter. Based upon these statements, answer the following questions. The percent that a company adds to its cost of sales to determine the selling price is called a markup. That is Hershey’s markup percent? Round to one decimal place.
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