Financial Statement Analysis Page 31
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51752
Chapter 15
S15-2
Trend analysis [5–10 min]
1
Mariner, Corp., reported the following revenues and net income amounts:
(In millions)
2013
2012
2011
2010
Revenue ..............................
$9,910
$9,700
$9,210
$9,110
Net income..........................
7,475
7,400
5,495
4,690
Requirements
1. Calculate Mariner’s trend analysis for revenues and net income. Use 2010 as the
base year, and round to the nearest percent.
2. Which measure increased faster during 2011–2013?
S15-3
Vertical analysis [10–15 min]
2
Tri-State Optical Company reported the following amounts on its balance sheet at
December 31, 2012 and 2011:
2012
2011
Cash and receivables . . . . . . . . . . . . . . . .
$
54,530
$
46,860
Inventory . . . . . . . . . . . . . . . . . . . . . . . . .
42,435
32,670
Property, plant, and equipment, net . . . . .
108,035
85,470
Total assets . . . . . . . . . . . . . . . . . . . . . . . .
$
205,000
$
165,000
Requirement
1. Prepare a vertical analysis of Tri-State assets for 2012 and 2011.
S15-4
Common-size income statement [10 min]
3
Data for Martinez, Inc., and Rosado, Corp., follow:
Martinez
Rosado
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . .
$
10,600
$
18,600
Cost of goods sold . . . . . . . . . . . . . . . . . .
6,455
13,522
Other expenses . . . . . . . . . . . . . . . . . . . . .
3,541
4,185
Net income . . . . . . . . . . . . . . . . . . . . . . . .
$
604
$
893
Requirements
1. Prepare common-size income statements.
2. Which company earns more net income?
3. Which company’s net income is a higher percentage of its net sales?
S15-5
Evaluating current ratio [5–10 min]
4
Win’s Companies, a home improvement store chain, reported the following
summarized figures:
WIN’S COMPANIES
Income Statement
Years Ended May 31, 2012 and 2011
2012
2011
Net sales
$
50,200,000
$
43,800,000
28,400,000
29,300,000
Cost of goods sold
500,000
140,000
Interest expense
5,800,000
8,400,000
All other expenses
$
15,500,000
$
5,960,000
Net income
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