FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Chapter 1, Problem 20E
Summary Introduction
Introduction: The income statement is one of the most crucial financial statements which shows the financial performance of a business for the specified accounting period. This is also known as
To prepare: The income statement of the company for the year ended December 31, 2014.
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Prepare a horizontal analysis of the following excerpt of an income statement.
Eye Witness Security GmbH Income Statement
2012
2011
Net sales
€540.400
€573.000
Cost of goods sold
130.300
165.800
Gross profit (loss)
410.100
407.200
Operating expenses
264.900
205.100
Net income (loss)
€145.200
€202.100
GIVE THE COMPARATIVE INCOME STATEMENT HORIZONTAL AND VERTICAL ANALYSIS FROM THE FOLLOWING INCOME STATEMENT BELOW
JOLLIBEE INCOME STATEMENT
ITEM
2016
2017
2018
2019
2020
Sales/Revenue
113.81B
133.61B
161.17B
179.63B
129.31B
Sales Growth
-
17.40%
20.62%
11.45%
-28.01%
Cost of Goods Sold (COGS) incl. D&A
-
-
132.96B
150.88B
115.39B
COGS Growth
-
-
-
13.47%
-23.52%
COGS excluding D&A
89.27B
105.39B
121.08B
137.38B
100.82B
Depreciation & Amortization Expense
4B
4.75B
11.89B
13.5B
14.57B
Depreciation
3.93B
4.66B
11.73B
13.34B
14.32B
Amortization of Intangibles
68.99M
78.95M
151.82M
145.42M
245.23M
Gross Income
20.54B
23.48B
28.21B
28.75B
13.92B
Gross Income Growth
-
14.30%
20.12%
1.93%
-51.57%
Gross Profit Margin
-
-
-
-
10.77%
SG&A Expense
-
-
17.64B
20.21B
20.42B
SGA Growth
-
-
-…
Computing NOPAT, NOPM and RNOA
LVMH Moët Hennessy Louis Vuitton SE (LVMH) is a French multinational luxury goods conglomerate headquartered in Paris. The
following information is selected from their 2017 annual report.
(€ thousands)
Revenue
Operating income
Net interest expense and other nonoperating expense
Net income
Operating assets
Operating liabilities
LVMH has an income tax rate of approximately 30%
a. Compute LVMH's net operating profit after taxes (NOPAT) for 2017 and 2016.
Round answers to the nearest whole number.
2016 €
2017 €
2017 2016
42,636 37,600
8,113 6,904
179
432
5,616 4,363
67,246 58,504
26,714 24,340
b. Compute LVMH's net operating profit margin (NOPM) for each year.
Round answers to one decimal place. (Ex: 0.2345 = 23.5%)
%6
2016
2017
c. Compute LVMH's return on net operating assets (RNOA) for 2017.
Round answers to one decimal place. (Ex: 0.2345 = 23.5%)
2017
Chapter 1 Solutions
FINANCIAL ACCT-CONNECT
Ch. 1 - Prob. 1DQCh. 1 - Technology is increasingly used to process...Ch. 1 - Identify four kinds of external users and describe...Ch. 1 - What are at least three questions business owners...Ch. 1 - Prob. 5DQCh. 1 - Describe the internal role of accounting for...Ch. 1 - Identify three types of services typically offered...Ch. 1 - Prob. 8DQCh. 1 - Why is accounting described as a service activity?Ch. 1 - What are some accounting-related professions?
Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - What does the concept of objectivity imply for...Ch. 1 - Prob. 14DQCh. 1 - Prob. 15DQCh. 1 - Prob. 16DQCh. 1 - Define (a) assets, (b) liabilities, (c) equity,...Ch. 1 - Prob. 18DQCh. 1 - Prob. 19DQCh. 1 - What do accountants mean by the term revenue?Ch. 1 - Prob. 21DQCh. 1 - Prob. 22DQCh. 1 - Prob. 23DQCh. 1 - Prob. 24DQCh. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Define and explain return on assets.Ch. 1 - Define return and risk. Discuss the trade-off...Ch. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 34DQCh. 1 - Choose from the following term or phrase a through...Ch. 1 - Prob. 2QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - Prob. 7QSCh. 1 - Applying the accounting equation A1 Use the...Ch. 1 - Prob. 9QSCh. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Prob. 12QSCh. 1 - Prob. 13QSCh. 1 - Prob. 14QSCh. 1 - Prob. 15QSCh. 1 - Prob. 16QSCh. 1 - Prob. 1ECh. 1 - Identifying accounting users and uses C2 Part A....Ch. 1 - Prob. 3ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Determine the missing amount from each of the...Ch. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Prob. 14ECh. 1 - Prob. 15ECh. 1 - Use the information in Exercise 1-15 to prepare an...Ch. 1 - Prob. 17ECh. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Prob. 1PSACh. 1 - Prob. 2PSACh. 1 - Prob. 3PSACh. 1 - Prob. 4PSACh. 1 - Prob. 5PSACh. 1 - Prob. 6PSACh. 1 - Prob. 8PSACh. 1 - Prob. 9PSACh. 1 - Prob. 10PSACh. 1 - Prob. 11PSACh. 1 - Prob. 12PSACh. 1 - Prob. 13PSACh. 1 - Prob. 14PSACh. 1 - Prob. 1PSBCh. 1 - Prob. 3PSBCh. 1 - Prob. 4PSBCh. 1 - Prob. 5PSBCh. 1 - Prob. 6PSBCh. 1 - Prob. 7PSBCh. 1 - Prob. 8PSBCh. 1 - Prob. 9PSBCh. 1 - Prob. 10PSBCh. 1 - Prob. 11PSBCh. 1 - Prob. 12PSBCh. 1 - Prob. 13PSBCh. 1 - Prob. 14PSBCh. 1 - Prob. 1SPCh. 1 - Prob. 2BTNCh. 1 - Prob. 7BTNCh. 1 - Prob. 9BTN
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- The following select account data is taken from the records of Reese Industries for 2019. A. Use the data provided to compute net sales for 2019. B. Prepare a simple income statement for the year ended December 31, 2019. C. Compute the gross margin for 2019. D. Prepare a multi-step income statement for the year ended December 31, 2019.arrow_forwardGIVE THE COMPARATIVE INCOME STATEMENT HORIZONTAL ANALYSIS FROM THE FOLLOWING INCOME STATEMENT BELOW JOLLIBEE INCOME STATEMENT ITEM 2016 2017 2018 2019 2020 Sales/Revenue 113.81B 133.61B 161.17B 179.63B 129.31B Sales Growth - 17.40% 20.62% 11.45% -28.01% Cost of Goods Sold (COGS) incl. D&A - - 132.96B 150.88B 115.39B COGS Growth - - - 13.47% -23.52% COGS excluding D&A 89.27B 105.39B 121.08B 137.38B 100.82B Depreciation & Amortization Expense 4B 4.75B 11.89B 13.5B 14.57B Depreciation 3.93B 4.66B 11.73B 13.34B 14.32B Amortization of Intangibles 68.99M 78.95M 151.82M 145.42M 245.23M Gross Income 20.54B 23.48B 28.21B 28.75B 13.92B Gross Income Growth - 14.30% 20.12% 1.93% -51.57% Gross Profit Margin - - - - 10.77% SG&A Expense - - 17.64B 20.21B 20.42B SGA Growth - - - 14.57% 1.02%…arrow_forwardowing income statement accounts in the popup window, E t for the year. ow for the year. Data Table nt for the year. at below. (Round to the nearest dollar. (Click on the following icon in order to copy its contents into a spreadsheet.) ncome Statement Income Statement Accounts for the Year Ending 2017 Balance nding December 31, 2017 Account Cost of goods sold Interest expense Taxes Revenue Selling, general, and administrative expenses Depreciation $341,000 $75,000 59,600 S743,000 $62,000 $116,000 Print Done %24 %24 %24arrow_forward
- GIVE THE COMPARATIVE INCOME STATEMENT VERTICAL ANALYSIS FROM THE FOLLOWING INCOME STATEMENT BELOW JOLLIBEE INCOME STATEMENT ITEM 2016 2017 2018 2019 2020 Sales/Revenue 113.81B 133.61B 161.17B 179.63B 129.31B Sales Growth - 17.40% 20.62% 11.45% -28.01% Cost of Goods Sold (COGS) incl. D&A - - 132.96B 150.88B 115.39B COGS Growth - - - 13.47% -23.52% COGS excluding D&A 89.27B 105.39B 121.08B 137.38B 100.82B Depreciation & Amortization Expense 4B 4.75B 11.89B 13.5B 14.57B Depreciation 3.93B 4.66B 11.73B 13.34B 14.32B Amortization of Intangibles 68.99M 78.95M 151.82M 145.42M 245.23M Gross Income 20.54B 23.48B 28.21B 28.75B 13.92B Gross Income Growth - 14.30% 20.12% 1.93% -51.57% Gross Profit Margin - - - - 10.77% SG&A Expense - - 17.64B 20.21B 20.42B SGA Growth - - - 14.57% 1.02%…arrow_forwardAnalyze and compare Clorox and Procter & Gamble The Clorox Company (CLX) and The Procter & Gamble Company (PG) produce and sell packaged consumer products around the world. Income and interest expense information from financial statements for a recent year follows (in millions): Clorox Procter & Gamble Interest expense $88 $579 Income before income tax expense 983 13,369 a. Compute the times interest earned for each company. Round to one decimal place. Clorox: fill in the blank 1 Procter & Gamble: fill in the blank 2 b. If you were a lender to these two companies, which one appears to have the greater coverage of interest expense and thus the greater protection for your loan interest?arrow_forwardComputing NOPAT, NOPM and RNOA LVMH Moët Hennessy Louis Vuitton SE (LVMH) is a French multinational luxury goods conglomerate headquartered in Paris. The following information is selected from their 2020 annual report. (€ millions) 2020 2019 Revenue Operating income Net financial income/(expense) Net income Operating assets 44,651 53,670 7,972 11,273 (608) (559) 4,702 7,171 107,932 95,592 Operating liabilities 45,139 45,431 LVMH has an income tax rate of approximately 30% a. Compute LVMH's net operating profit after taxes (NOPAT) for 2020 and 2019. Round answers to one decimal place. 2019 € 2020 € 0 0 b. Compute LVMH's net operating profit margin (NOPM) for each year. Round answers to two decimal places (i.e. 0.25466 = 24.47%) 2019 2020 0% 0% c. Compute LVMH's return on net operating assets (RNOA) for 2020. Round answer to two decimal places (i.e. 0.25466 = 24.47%) 2020 Check 0%arrow_forward
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