The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015). Required: 1. Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages for the income statement of Insignia Corporation for the year ended December 31, 2015 (amounts in billions). 2-a. Conduct a vertical analysis by expressing each line as a percentage of total revenues. 2-b. Excluding income tax and other operating costs, did Insignia earn more profit per dollar of revenue in 2015 compared to 2014?
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- The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015) conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages for the income statement of Insignia Corporation for the year ended December 31, 2015 (amounts in billions). (Decreases should be indicated by a minus sign)The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015). Let’s see whether these changes are reflected in the income statement of Insignia Corporation for the year ended December 31, 2015 (amounts in billions). Insignia reported average net fixed assets of $190 billion in 2015 and $146 billion in 2014. Compute the fixed asset turnover ratios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2015 or 2014? Insignia reported average stockholders’ equity of $180 billion in 2015 and $146 billion in 2014. The company has not issued preferred stock. Compute the return on equity ratios for both years. Did the company generate greater returns for stockholders in 2015 or 2014?The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015). Let’s see whether these changes are reflected in the income statement of Insignia Corporation for the year ended December 31, 2015 (amounts in billions). Compute the gross profit percentage for each year. Assuming that the change from 2014 to 2015 is the beginning of a sustained trend, is Insignia likely to earn more or less gross profit from each dollar of sales in 2016? Compute the net profit margin for each year. Given your calculations here and in requirement 1, explain whether Insignia did a better or worse job of controlling expenses other than the costs of crude oil and products in 2015 relative to 2014.
- The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015). Let’s see whether these changes are reflected in the income statement of Insignia Corporation for the year ended December 31, 2015 (amounts in billions). 2015 2014 Revenues $ 245 $ 258 Cost of Purchased Crude Oil and Products 125 131 Other Operating Costs 61 55 Income before Income Tax Expense 59 72 Income Tax Expense 28 35 Net Income $ 31 $ 37 Required: Compute the gross profit percentage for each year. Assuming that the change from 2014 to 2015 is the beginning of a sustained trend, is Insignia likely to earn more or less gross profit from each dollar of sales in 2016? Compute the net profit margin for each year. Given your calculations here and in requirement 1, explain whether Insignia did a better or worse job of controlling expenses other than the costs of crude oil and products in…XYZ Co. wants to know if its profitability performance has increased from 2009 to 2010. The company had net income of $48,000 in 2009 and $50,000 in 2010. Total assets were $480,000 at the end of 2009, and $560,000 at the end of 2010. Calculate return on assets(ROA) for 2009 and 2010and Comment on the results.For 2014, Lindell Company reported its most significant decline in net income in years. At the end of the year, H. Finn, the president, is presented with the following condensed comparative income statement: Instructions1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2013 as the base year. Round to one decimal place.2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in(1).
- Compute trend percentages for the following items taken from the financial statements of Lopez Plumbing over a five-year period. Treat 2014 as the base year. State whether the trends are favorable or unfavorable. (Dollar amounts are stated in thousands.) 2018 2017 2016 2015 2014 Sales $81,400 $74,000 $61,500 $59,000 $50,000 Cost of Goods Sold 58,500 48,000 40,500 37,000 30,000At year-end 2015, Wallace Landscaping’s total assets were $1.9 million and its accounts payable were $425,000. Sales, which in 2015 were $2.3 million, are expected to increase by 30% in 2016. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $430,000 in 2015, and retained earnings were $340,000. Wallace has arranged to sell $65,000 of new common stock in 2016 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2016. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 7%, and 40% of earnings will be paid out as dividends. How much new long-term debt financing will be needed in 2016? (Hint: AFN - New stock = New long-term debt.) Do not round…James Furnishings generated $2 million in sales during 2016, and its year-end total assets were $1.5 million. Also, at year-end 2016, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accrued liabilities. Looking ahead to 2017, the company estimates that its assets must increase by $0.75 for every $1.00 increase in sales. James' profit margin is 3%, and its retention ratio is 35%. How large of a sales increase can the company achieve without having to raise funds externally? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Do not round intermediate calculations. Round your answer to the nearest cent.
- Given the income statement below, Mega Trade Inc. wants to find the resulting net income for the year 2018 (in million). What is the right amount? Income Statement ($ Million) Year End 2015 2016 2017 2018 Sales 1,234.90 1,251.70 1,300.40 1,334.40 Cost of Sales -679.1 -659 -681.3 -667 Selling & Administration -339.7 -348.6 -351.2 -373.3 Depreciation -47.5 -52 -55.9 -75.2 Other Income/Expenses 11.8 7.6 7 8.2 Interest Income 1.3 1.4 1.7 2 Interest Expense -16.2 -15.1 -20.5 -23.7 Income Taxes -56.8 -64.2 -67.5 -72.6 Dividends -38.3 -38.7 -39.8 -40.1 CHOICES: A. 108.7B. 132.7C. No choice givenD. 132.8E. 121.8The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015). Conduct a vertical analysis by expressing each line as a percentage of total revenues. (Round percentage values to 1 decimal place.)Suppose the years 2005 to 2009 were a period of rapid growth for a certain chain of coffeehouses and the company's revenues grew by more than 50% during that period. Use the hypothetical financial data for the company to answer the questions. chart shown (attached) then questions: (A): Calculate the asset turnover ratio for 2008 and 2009. (Round your answers to two decimal places.) 2008= 2009= (B): Calculate the net profit margin (as a %) for 2007, 2008, and 2009. (Round your answers to the nearest tenth of a percent.) 2007 = % 2008 = % 2009 = % (C): Calculate the return on investment (as a %) for 2007, 2008, and 2009. (Round your answers to the nearest tenth of a percent.) 2007 = % 2008 = % 2009 = %