EXHIBIT 1 Income Statement (in millions) Year Ending 2016 $71,890 21,685 2015 $7

Question

EXHIBIT 1 Income Statement (in millions) Year Ending 2016 $71,890 21,685 2015 $70,074 21,536 17,556 15,409 2014 $74,331 51,585 20,959 16,323 Total Revenue Gross Profit Operating Income 20,645 Net Income 16,540

Explanation / Answer

Given that- 2016 2015 2014 income statement i Total revenue $         71,890 $         70,074 $         74,331 ii Gross profit $         21,685 $         21,536 $         51,585 iii Operating income $         20,645 $         17,556 $         20,959 iv Net income $         16,540 $         15,409 $         16,323 Balance sheet v Current asset $         65,032 $         60,210 $         55,744 vi Total asset $      141,208 $      133,411 $      130,358 vii Current liabilities $         26,287 $         27,747 $         25,031 viii Total liabilities $         70,790 $         62,261 $         60,606 ix Stockholder equity $         70,418 $         71,150 $         69,752 Geo wise sales for US x Consumer $           5,420 $           5,222 $           5,096 xi Pharmaceutical $         20,125 $         18,333 $         17,432 xii Medical devices $         12,266 $         12,132 $         12,254 xiii=x+xi+xii Total US sales $         37,811 $         35,687 $         34,782 Part 1 a=iv/vi ROA = Net Income/Total Asset 11.7% 11.6% 12.5% b=iv/ix ROE=Net Income/Total equity 23.5% 21.7% 23.4% c=v/vii Current ratio = Current Assets/Current liabilities                   2.5                   2.2                   2.2 d=xiii/i U.S. Sales to Total Sales 52.6% 50.9% 46.8% Part 2 Annual growth activities 2015-2016 2014-2015 Total revenue 2.6% -5.7% Operating income 17.6% -16.2% Gross profit 0.7% -58.3% Total Current asset 8.0% 8.0% Net income 7.3% -5.6% Total Assets 5.8% 2.3% Total liabilities 13.7% 2.7% Total Stockholder equity -1.0% 2.0% Note : Formula used for year on year compare is Current year/Last year -1 expressed as % Eg. Total revenue for 2016 = (71890/70077)-1 Part 3>1 Current ratio has improved from 2.2 to 2.5 in year 2016, which is good. Firm can easily pay its sort term debt. Part 3>2 Total share holder equity has increased in 2015 from 2014, thereafter it decline in 2016 compared to 2015. Increase in 2015 is due to retained earning. Decline in 2016 is due to higher dividend paid or buyback made. Under both the situation Debt to equity ration will increase in 2016 Part 3>3 year 2015 seems to be tough for the firm as margin % has decline along with the sales. Gross profit has significantly decline this could be due to higher cost of sales. Revenue from medical business is declining year on year.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.