$ in millions 2015 $ 2014$ 2013$ Sales 52465 48813 45041 Cost of Goods Sold (283
ID: 2540941 • Letter: #
Question
$ in millions
2015 $
2014$
2013$
Sales
52465
48813
45041
Cost of Goods Sold
(28364)
(26420)
(25034)
SG&A Expenses
(10877)
(10853)
(10557)
Other
174
203
(303)
Taxes
(5016)
(4242)
(2984)
Net Income
8382
7501
6136
Explain the reason for changes in net income. Please do not point out the obvious of a increase in sales or decrease in expenses.
$ in millions
2015 $
2014$
2013$
Sales
52465
48813
45041
Cost of Goods Sold
(28364)
(26420)
(25034)
SG&A Expenses
(10877)
(10853)
(10557)
Other
174
203
(303)
Taxes
(5016)
(4242)
(2984)
Net Income
8382
7501
6136
Explanation / Answer
In a Business, It is not only Revenue from Operation (i.e. Sales) which is effecting the Net Income but Other Income also make a impact on Net Income. In Year 2013 there is no Other Income but there exist some other expenses. In Year 2014 there is a huge increment in Other Income of $506 (203+303). This is a reason of Increment in Net Income. In Year 2015 the Other Income decreases from $203 to $174. But Net Income increases because SG&A Expenses are not increased so much in proportion to sales.
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