Question
Common Sized Income Statement 2010 2009 2008 Net Revenue 100 100 100 Cost of Sales 34.69 44.31 44.54 Gross Margins 65.31 55.69 55.46 Research and Development 15.07 16.09 15.22 Marketing, General and Administrative 14.46 22.58 14.51 Restructing and Asset Impairment Charges 0.66 1.89 Amortization of acquisition- related intangibles 0.04 0.1 0.02 Operating Expenses 29.58 39.43 31.63 Operating Income 35.73 16.26 23.82 Gains (Losses) on equity method, net 0.27 -0.42 -3.67 Gains (losses) on other equity investments, net 0.53 -0.07 -1 Interest and other, net 0.25 0.46 1.3 Income before taxes 36.78 16.24 20.45 Provision for other taxes 10.5 3.8 6.37
Net Income 26.28 12.44 14.08 compute at least two financial ratios from each of the five types: liquidity, activity, leverage, profitability, and market ratios. Use the ratios to support your analysis from last unit. Analyze any differences in your conclusions
By extracting the information: Consolidated Income statement of company hncone Staternest 2010 2009 2008 43, 23 35,127 37s86 Net reveme Cost of sales 15.132 15.566 16.742 6576 5.653 5722 Research and development Marketing, general and 6,309 7931 5452 231 710 Restructuring and assetimpairment Amortizatimn of acquisition-related 18 35 operatiog erperses 12,303 13,850 Gains losses on equity method 117 147 1380 231 Gains Oosses)on other equity 376 109 163 hterest and other net 488 Provision for taxes 4.581 1.335 2394 2.06 0.75 0.53 Weiglated average 5K55 5K57 5,663 DT ted
Explanation / Answer
As data mentioned is only Incoem statement we can find Profitabiltiy ratio alone and for other ratios we need balance sheet data to calculate.
Gross margin= Gross Profit/Sales
Net Incoem Margin= Net Income/Sales
Gross Margin(%):
2010=28941/43623=66.34%
2009=19561/36127=54.15%
2008=20844/37586=55.46%
Net Income (%)
2010=11464/43623=26.28%
2009=4369/35127=12.44%
2008=5292/37586=14.08%
