ValuePlus, In., was organized several years ago to develop and market computer software programs. The company is small but growing, and you are considering the purchase of some of its ordinaryshares as an investment. the following data on the company is available for the past two years:VALUEPLUS, INC.Comparative Income StatementFor the Years Ended December 31, 2014 and 201320142013P10,000,0006,500,0003,500,0002,630,000870,000120,000750,000225,000525.000P7,500,0004,500,0003,000,0002,280,000720,000120,000600,000180,000P 420,000Sales.....Less cost of goods sold.Gross margin..Less operating expensesNet operating income..Less interest expense.Net income before taxesLess income taxes (30%).Net income. VALUEPLUS, INC.Comparative Retained Earnings StatementFor the Years Ended December 31, 2014 and 201320142013P1,200,000525,0001.725.000P 980,000420,0001400,000Retained carmings, January 1 ..Add net income (above).Total.Deduct cash dividends paid:Preference dividends.Ordinary dividendsTotal dividends paid.Retained earnings, December 31.60,000180.000240,000PL.485,00060,000140,000200.000P1.200.000VALUEPLUS, INC.Comparative Statement of Financial PositionDecember 31, 2014 and 201320142013AssetsCurrent assets:CashAccounts receivable, net.InventoryPrepaid expensesTotal current assets.P 100,000750,0001,500,00050.0002,400,0002,585.000P4.985.000P 200,000400,000600,00050.0001,250,0002.700.000P3.950.000Plant and equipment, net.Total assets.Liabilities and EquityLiabilities:Current liabilitiesBonds payable, 12%.Total liabilities.Equity:Preference shares, 8%, P10 par..Ordinary shares, PS par.Retained earnings.Total equity.Total liabilities and equityP1,250,0001.000.0002,250.000P 500,0001.000.0001.500,000750,000500,0001.485.0002.735.000P4.985.000750,000500,0001,200,0002,450.000P3,950.000The president of ValusPlus, Inc, is very concensed. Salas increased by P25 million daring 2014, yat the company's net incoume increased by only P105,000. Also, the company's oparating expanses want up in 2014, aven though a major effort waslauncaed during the year to cut costs.Requirements:1. For botia 2013 and 2014, prepare the income statement and the statament of financial positicn in common-size form. (Round computations to cna decimal place.)2 From your work in () abova, explain to tiae presidant nay the increase in profits was so small in 2014. Were any banefits realized fom the company's cost-cuting efforts? Explain.

Given, (1) Even though the Sales has been increased by P2.5 million during 2014, but the Net Income…

ValuePlus, In, was organized several years ago to develop and market computer software programs. The company is small but growing, and you are considering the purchase of some of its ordinary shares as an investment. the following data on the company is available for the past two years: VALUEPLUS, INC. Comparative Income Statement For the Years Ended December 31, 2014 and 2013 Sales... Less cost of goods sold. Gross margin... Less operating expenses Net operating income. Less interest expense . Net income before taxes Less income taxes (30%). Net income. 2014 P10,000,000 |6,500,000 3,500,000 2,630,000 870,000 120,000 750,000 225,000 P 525.000 2013 P7,500,000 4,500,000 3,000,000 _2,280,000 720,000 120,000 600,000 180,000 P 420,000

ValuePlus, In, was organized several years ago to develop and market computer software programs. The company is small but growing, and you are considering the purchase of some of its ordinary shares as an investment. the following data on the company is available for the past two years: VALUEPLUS, INC. Comparative Income Statement For the Years Ended December 31, 2014 and 2013 Sales... Less cost of goods sold. Gross margin... Less operating expenses Net operating income. Less interest expense . Net income before taxes Less income taxes (30%). Net income. 2014 P10,000,000 |6,500,000 3,500,000 2,630,000 870,000 120,000 750,000 225,000 P 525.000 2013 P7,500,000 4,500,000 3,000,000 _2,280,000 720,000 120,000 600,000 180,000 P 420,000

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 9MC

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