Question

Please answer questions 1-4. You need to show your clear calculation to support each statement provide a paragraph of interpretation related to the result of your analysis on each statement. I can't award credit if all questions and instructions are not answered.

Question 1: Common size for income statement

Income Statement (Common Size) :

                                                                 Consolidated Income Statement

	2011	%	2010	%
Revenue	$19,176.1		$18,627.0
Cost of sales	( 10,571.7)		( 10,239.6 )
Gross Profit	8,604.4		8,387.4
Selling and administrative expenses	(   6,149.6)		( 5,953.7)
Restructuring charges	(      195.0)		0.0
Goodwill impairment	(      199.3)		0.0
Intangible and other asset impairment	(     202.0)		0.0
Other income (expenses)	88.5		( 7.9 )
Operating Income	$ 1,947.0		$ 2,425.8
Interest and other income	49.7		115.8
Interest expense	(      40.2)		( 38.7)
Income before income taxes	$ 1,956.5		$ 2,502.9
Provision for income taxes	(     469.8)		( 619.8)
Net Income	$ 1,486.7		$ 1,883.4

Question 2: Comparative Analysis for balance sheet:

	2011	2010	Difference	% changed
ASSETS:
Current Assets
Cash and equivalents	$ 2,291.1	$ 2,133.9
Short-term investments	1,164.2	642.2
Account receivable	2,883.9	2,795.3
Inventory	2,357.0	2,438.4
Prepaid expenses and other assets	765.6	602.3
Deferred income taxes, net	272.4	227.2
Total Current Assets	$ 9,734.0	$ 8,839.3
Property and equipment, gross	4,255.7	4,103.0
Accumulated depreciation	(2,221.9)	(2,298.0)
Property and equipment, net	$ 1,957.7	$ 1,891.1
Identifiable intangible assets	467.4	743.1
Good will	193.5	448.8
Deferred income taxes and other assets	897.0	520.4
Total Assets	$13,249.6	$12,442.7
Liabilities and Stockholders’ Equity
Current Liability :
Current portion of long-term debt	$        32.0	$          6.3
Note Payable	342.9	177.7
Account Payable	1,031.9	1,287.6
Accrued liabilities	1,783.9	1,761.9
Income taxes payable	86.3	88.0
Total Current Liabilities	$   3,277.0	$    3,321.5
Long term debt	437.2	441.1
Deferred taxes and other long-term liabilities	842.0	854.5
Total Liabilities	$ 4,556.2	$ 4,617.1
Redeemable preferred stock	$         0.3	$         0.3
Common Shareholders’ Equity
Common stock	2.8	2.8
Capital in excess of stated value	$ 2,781.4	$ 2,497.8
Retained earnings	5,451.4	5,073.3
Accumulated other comprehensive income	367.5	251.4
Total Common Shareholders’ Equity	$ 8,693.1	$ 7,825.3
Total Liabilities and Shareholders’ Equity	$13,249.6	$12,442.7

Question 3 : Please create a statement of cash flow with indirect method

Statement of Cash Flow with Indirect method

	2011	2010	Difference	Operating	Investing	Financing
ASSETS:
Current Assets
Cash and equivalents	$ 2,291.1	$ 2,133.9
Short-term investments	1,164.2	642.2
Account receivable	2,883.9	2,795.3
Inventory	2,357.0	2,438.4
Prepaid expenses and other assets	765.6	602.3
Deferred income taxes, net	272.4	227.2
Total Current Assets	$ 9,734.0	$ 8,839.3
Property and equipment, gross	4,255.7	4,103.0
Accumulated depreciation	(2,221.9)	(2,298.0)
Property and equipment, net	$ 1,957.7	$ 1,891.1
Identifiable intangible assets	467.4	743.1
Good will	193.5	448.8
Deferred income taxes and other assets	897.0	520.4
Total Assets	$13,249.6	$12,442.7
Liabilities and Stockholders’ Equity
Current Liability :
Current portion of long-term debt	$       32.0	$          6.3
Note Payable	342.9	177.7
Account Payable	1,031.9	1,287.6
Accrued liabilities	1,783.9	1,761.9
Income taxes payable	86.3	88.0
Total Current Liabilities	$   3,277.0	$ 3,321.5
Long term debt	437.2	441.1
Deferred taxes and other long-term liabilities	842.0	854.5
Total Liabilities	$ 4,556.2	$ 4,617.1
Redeemable preferred stock	$         0.3	$         0.3
Common Shareholders’ Equity
Common stock	2.8	2.8
Capital in excess of stated value	$ 2,781.4	$ 2,497.8
Retained earnings	5,451.4	5,073.3
Accumulated other comprehensive income	367.5	251.4
Total Common Shareholders’ Equity	$ 8,693.1	$ 7,825.3
Total Liabilities and Shareholders’ Equity	$13,249.6	$12,442.7

Question 4:

Ration Analysis:

Return on Asset

Debt to assets ratio

Profit margin

Account receivable turnover & accounting receivable turnover

Inventory turnover & days of inventory turnover

Answer 1

Comparable Income Statement.

	2011	%	2010	%
Revenue	$19,176.1		$18,627.0
Cost of sales	(10,571.7)	10571.7 / 19176.1 x 100 = 55.13%	( 10,239.6 )	54.97%
Gross Profit	8,604.4	8604.4 / 19176.10 = 44.87%	8,387.4	45.03%
Selling and administrative expenses	(   6,149.6)	6149.6 / 19176.1 = 32.07%	( 5,953.7)	31.96%
Restructuring charges	(      195.0)	195 / 19176.1 = 1.017%	0.0
Goodwill impairment	(      199.3)	199.3 / 19176.1 = 1.04%	0.0
Intangible and other asset impairment	(     202.0)	202 / 19176.1 = 1.053%	0.0
Other income (expenses)	88.5	88.5 / 19176.1 = 0.46%	( 7.9 )	0.04%
Operating Income	$ 1,947.0	1,947 / 19176.1 = 10.15%	$ 2,425.8	13.02%
Interest and other income	49.7	49.7 / 19176.1 = 0.26%	115.8
Interest expense	(      40.2)	40.2 / 19176.1 = 0.21%	( 38.7)	0.21%
Income before income taxes	$ 1,956.5	1,956.5 / 19176.1 = 10.20%	$ 2,502.9	13.44%
Provision for income taxes	(     469.8)	469.8 / 19176.1 = 2.45%	( 619.8)	3.33%
Net Income	$ 1,486.7	1486.7 / 19176.1 = 7.75%	$ 1,883.4	10.11%