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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Case 1-70 Financial Statement Analysis

Reproduced below are portions of the president’s letter to stockholders and selected income statement and balance sheet data for the Wright Brothers Aviation Company. Wright Brothers is a national airline that provides both passenger service and package delivery service.

Chapter 1, Problem 70.1C, Case 1-70 Financial Statement Analysis Reproduced below are portions of the presidents letter to

Required:

What trends do you detect in revenues, operating income. and net income for the period 2015-2019?

To determine

Concept Introduction:

Financial Statement analysis is done using the components of financial statement. These components are Balance sheet, Income statement, Statement of Cash flows etc. Annual report of a company contains financial statement of that year and previous year for comparison. If the company has subsidiaries or segments, the financial statement shall be consolidated for whole business of the company.

To Calculate:

The trend analysis of Revenue, operating income and net income for the given period 2015-2019.

Explanation

The trend analysis of Revenue, operating income and net income for the given period 2015-2019 is explained as follows:

    Wright Brothers Aviation Company
    Trend Analysis
          
    Year 2015 Year 2016 Year 2017 Year 2018 Year 2019
    Revenue $ 540,486 $ 593,755 $ 500,186 $ 197,025 $ 176,542
    Revenue Trend % 109.9%84...

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