Discussions
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Income Statement

Referencing this weeks readings and lecture, address the following:

What are the two causes of an increasing or decreasing sales number?Discuss all the reasons that might explain an increase or decrease in gross profit.
Respond to at least two of your classmates posts.
Analyzing an Income Statement

Income statements are presented in the table below for the Elf
Corporation for the years ending December 31, 2010, 2009, and 2008.
Write a one-paragraph analysis of Elf Corporations profit performance
for the period. Create a common-sized income statement for the three
years. What conclusions can you draw from the different parts of the
statement? What are the causes and effects of Elf’s performance for
those three years?

Elf Corporation Income Statements for the Years Ending December 31

(in millions)
2010
2009
2008

Sales
$700
$650
$550

Cost of goods sold
350
325
275

Gross profit
350
325
275

Operating Expenses:

Administrative
100
100
100

Advertising and marketing
50
75
75

Operating profit
$200
$150
$100

Interest expense
70
50
30

Earnings before tax
$130
$100
$ 70

Tax expense (50%)
65
50
35

Net income
$ 65
$ 50
$ 35

Respond to at least two of your classmates posts.
Respond to at least two of your classmates posts.Respond to at least two of your classmates posts.