.

2002

2001

’01 to ’02
.

$

% of Sales

$

% of Sales

% increase
Net sales

62349545

26072585

139.1%

Cost of Goods Sold

51402174

82.4%

21010605

80.6%

144.6%
Gross Profit

10947371

17.6%

5061980

19.4%

116.3%

Advertising

1818126

2.9%

327479

1.3%

455.2%
General & Administrative

8067331

12.9%

4162408

16.0%

93.8%
Total Operating Exp

9885457

15.9%

4489887

17.2%

120.2%

Income from Operations

1061914

1.7%

572093

2.2%

85.6%

Interest Income

17977

0.0%

16237

0.1%

10.7%
Gain on Marketable Securities

0.0%

41962

0.2%

-100.0%
Interest Expense

-2400

0.0%

-3184

0.0%

-24.6%
Total Other

15577

0.0%

55015

0.2%

-71.7%

Income Before Taxes

1077491

1.7%

627108

2.4%

71.8%

Taxes

536143

0.9%

161000

0.6%

233.0%

Net Income

541348

0.9%

466108

1.8%

16.1%
Consider the following questions in your evaluation:
What was the percentage increase in sales from 2001 to 2002?
What impact did the new sales have on the gross profit?
Were the new sales more or less profitable sales based upon their impact on the gross profit?
What happened to the advertising expenses ($ & %)?
Is the change in advertising likely to be long term? Why?
What impact did the new sales have on G&A (General & Administrative)? Why?
Are total operating expenses up or down as a percentage?
What impact does the change in operating expenses have on the bottom line?
Is income from operations up or down ($ & %)?
Is total other a significant dollar amount? Percentage increase?
Look at the amount of taxes paid. Why is the change so significant?
Compare the increases in sales to the increase in profit after taxes. Was it worth it from an operations point of view? From the stockholders point of view?