Problem 1
Required: Express each income statement component as a percentage of sales, and comment on the trends in each line from | 2012 | 2013 | ||||||||||||
% | Sales | Comments | ||||||||||||
$ 1,000,000 | $ 1,200,000 | |||||||||||||
Cost of goods sold | $ 450,000 | $ 600,000 | ||||||||||||
Gross margin | $ 550,000 | |||||||||||||
Operating expenses | ||||||||||||||
Net income | $ (50,000) | $ 150,000 |
Problem 2
Required: Compute (1) accounts receivable turnover for 2013, (2) the inventory turnover for 2013, and (3) the net margin for 2012. | ||
Balance sheet items | ||
Accounts receivable | $ 380,000.00 | $ 376,000.00 |
Allowance for doubtful accounts | $ (20,000.00) | $ (16,000.00) |
Net accounts receivable | $ 360,000.00 | |
Inventory | $ 480,000.00 | $ 440,000.00 |
Income statement items | ||
$ 3,400,000.00 | $ 3,080,000.00 | |
$ 1,600,000.00 | $ 1,440,000.00 | |
$ 780,000.00 | $ 680,000.00 |