FINANCIAL+MANG.-W/ACCESS PRACTICE SET
13th Edition
ISBN: 9781337575614
Author: WARREN
Publisher: CENGAGE L
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Chapter 2, Problem 2.8APE
To determine
Horizontal analysis of income statement:
In horizontal analysis of income statement, the amount of each item of the current year financial statement is compared with the previous year financial statement. The amount of each item increased or decreased in the current income statement, and its respective percentage can be computed by taking the earlier statement as the base.
To prepare: A horizontal analysis of F Company’s income statement.
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Analysis and Interpretation of ProfitabilityBalance sheets and income statements for 3M Company follow.
3M COMPANY
Consolidated Statements of Income
For Years ended December 31 ($ millions)
2018
2017
Net sales
$32,765
$31,657
Operating expenses
Cost of sales
16,682
16,055
Selling, general and administrative expenses
7,602
6,626
Research, development and related expenses
1,821
1,870
Gain on sale of businesses
(547)
(586)
Total operating expenses
25,558
23,965
Operating income
7,207
7,692
Other expense, net*
207
144
Income before income taxes
7,000
7,548
Provision for income taxes
1,637
2,679
Net income including noncontrolling interest
5,363
4,869
Less: Net income attributable to noncontrolling interest
14
11
Net income attributable to 3M
$ 5,349
$ 4,858
*Interest expense, gross $350 million in 2018 and $322 million in 2017.
3M COMPANY
Consolidated Balance Sheets
At December 31 ($ millions, except per share amount)
2018
2017…
The comparative condensed income statements of Emley Corporation are shown below.
EMLEY CORPORATIONComparative Condensed Income StatementsFor the Years Ended December 31
2017
2016
Net sales
$726,000
$661,000
Cost of goods sold
531,300
462,000
Gross profit
194,700
199,000
Operating expenses
137,500
132,000
Net income
$ 57,200
$ 67,000
(a)Prepare a horizontal analysis of the income statement data for Emley Corporation using 2016 as a base. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45% or parentheses e.g. (45), (45%). Round percentages to 1 decimal place, e.g. 12.3%.)
EMLEY CORPORATIONCondensed Income Statements
Increase or (Decrease)During 2017
2017
2016
Amount
Percentage
Net sales
$726,000
$661,000
$
%
Cost of goods sold
531,300
462,000
%
Gross profit…
Here are the comparative income statements of Cullumber Corporation.
CULLUMBER CORPORATIONComparative Income StatementFor the Years Ended December 31
2022
2021
Net sales
$639,400
$578,200
Cost of goods sold
464,800
433,400
Gross Profit
174,600
144,800
Operating expenses
70,500
43,000
Net income
$ 104,100
$ 101,800
(a)Prepare a horizontal analysis of the income statement data for Cullumber Corporation, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
CULLUMBER CORPORATIONComparative Income Statementchoose the accounting period For the Years Ended December 31For the Month Ended December 31December 31
Increase or (Decrease) During 2022
2022
2021
Amount
Percentage
Net…
Chapter 2 Solutions
FINANCIAL+MANG.-W/ACCESS PRACTICE SET
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