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In: Finance
Financial Statement Analysis The financial statements of Gelato Corporation show the following information: Statement of Financial...
Financial Statement Analysis
The financial statements of Gelato Corporation show the following information:
Statement of Financial Position
December 31, 2020
Assets 2020 2019
Cash $257,000 $263,000
Accounts receivable 128,000 163,000
Fair value through net income investments 120,000 119,000
Inventory 320,000 361,000
Plant assets (net) 398,000 418,500
Intangible assets 102,000 128,500
Total Assets $1,325,000 $1,453,000
Liabilities and Equity
Accounts payable $240,000 $303,500
Long-term debt 60,000 137,500
Share capital 293,000 293,000
Retained earnings 732,000 719,000
Total Liabilities and equity $1,325,000 $ 1,453,000
Income Statement
Year Ended December 31, 2020
2020 2019
Net sales $725,000 $703,000
Cost of goods sold (474,000) (477,000)
Gross profit 251,000 226,000
Selling and admin expenses (126,000) (100,000)
Other expenses, net (106,000) (99,000)
Income before income tax 19,000 27,000
Income tax (5,400) (8,100)
Net income $13,600 $18,900
REQUIRED: Show all calculations. Round percentages to one decimal place.
A. Using horizontal analysis, analyze Gelato Corporation’s change in liquidity, solvency, and profitability in 2020.
B. Using vertical analysis, analyze Gelato Corporation’s decline in net income in 2020
C. Identify at least two profitability ratios that are obtained from the vertical analysis performed in part (b). Is profitability improving or deteriorating based on these ratios? Briefly explain
Solutions
jeff jeffy answered 1 year agoRelated Solutions
FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION The following information has been extracted from the financial statements and...
FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION
The following
information has been extracted from the financial statements and
notes of Brown Ltd.
2014
2013
Revenue
$ 870 000
$ 862 500
Interest expense
34 500
39 750
Income tax expense
66 900
39 750
Profit
78 750
84 150
Dividends
42 000
42 000
Total assets
810 000
832 500
Total debt
429 750
458 250
Share capital
258 000
243 000
Retained earnings
122 250
131 250
Required:
Using the above...
Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement For the...
Refer to the following financial statements for Crosby
Corporation:
CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 20X2
Sales
$
3,470,000
Cost of goods sold
2,230,000
Gross profit
$
1,240,000
Selling and administrative expense
678,000
Depreciation expense
298,000
Operating income
$
264,000
Interest expense
85,400
Earnings before taxes
$
178,600
Taxes
148,000
Earnings after taxes
$
30,600
Preferred stock dividends
10,000
Earnings available to common stockholders
$
20,600
Shares outstanding
150,000
Earnings per share
$
0.14
...
Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement For the...
Refer to the following financial statements for Crosby
Corporation:
CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 20X2
Sales
$
3,940,000
Cost of goods sold
2,580,000
Gross profit
$
1,360,000
Selling and administrative expense
697,000
Depreciation expense
272,000
Operating income
$
391,000
Interest expense
88,000
Earnings before taxes
$
303,000
Taxes
234,000
Earnings after taxes
$
69,000
Preferred stock dividends
10,000
Earnings available to common stockholders
$
59,000
Shares outstanding
150,000
Earnings per share
$
0.39
...
Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement For the...
Refer to the following financial statements for Crosby
Corporation:
CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 20X2
Sales
$
3,940,000
Cost of goods sold
2,580,000
Gross profit
$
1,360,000
Selling and administrative expense
697,000
Depreciation expense
272,000
Operating income
$
391,000
Interest expense
88,000
Earnings before taxes
$
303,000
Taxes
234,000
Earnings after taxes
$
69,000
Preferred stock dividends
10,000
Earnings available to common stockholders
$
59,000
Shares outstanding
150,000
Earnings per share
$
0.39
...
Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement For the...
Refer to the following financial statements for Crosby
Corporation:
CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 20X2
Sales
$
3,790,000
Cost of goods sold
2,420,000
Gross profit
$
1,370,000
Selling and administrative expense
744,000
Depreciation expense
238,000
Operating income
$
388,000
Interest expense
80,200
Earnings before taxes
$
307,800
Taxes
168,000
Earnings after taxes
$
139,800
Preferred stock dividends
10,000
Earnings available to common stockholders
$
129,800
Shares outstanding
150,000
Earnings per share
$
0.87
...
Establish an excel worksheet for the financial statement analysis framework. Refer to the following financial information;...
Establish an excel worksheet for the financial statement
analysis framework. Refer to the following financial
information;
On January 1, 2019, Frances Corp. started doing business and
the owners contributed $200,000 capital in cash.
The company paid $24,000 to cover the rent for the office space
for the 24-month period from January 1, 2019 to December 31,
2020.
On March 1, 2019, MSK Inc. entered into a consulting contract
under which Frances Corporation Contract under which Frances
Corporation promised to provide...
Describe the sources of information for financial statement analysis.
Describe the sources of information for financial
statement analysis.
What is the importance of working capital in the financial statements and for financial statement analysis?...
What is the importance of working capital in the financial
statements and for financial statement analysis?
Discuss the matching concept and its importance to income
reporting.
How is the balance sheet useful to investors?
Explain how comprehensive income is consistent with the
all-inclusive concept of accounting.
Explain how comprehensive income is consistent with the
financial capital maintenance concept. Give examples to support
your decision.
Financial statement analysis is an integral part of business analysis. In addition, explain why financial statements...
Financial statement analysis is an integral part of business
analysis. In addition, explain why financial
statements are important to the decision-making process in
financial analysis. Also, identify and discuss some of their
limitations for analysis purposes.
Part I: Reporting and Financial Statement Analysis Given the following financial statements for Voice-Soft, a voice...
Part I: Reporting and Financial Statement Analysis
Given the following financial statements for Voice-Soft, a voice
recognition company, answer the questions on the next page.
Income Statement for years
2010
2009
Sales
$5,500
$5,000
Operating Costs excluding Depreciation and Amortization
4,675
4,250
EBITDA
825
750
Depreciation and Amortization
190
180
EBIT
$635
$570
Interest Expense
62
50
EBT
$573
$520
Taxes (40%)
229
208
NI
$344
$312
Balance Sheet for years ending December 31
2010
2009
Assets:
Cash
$275
$250...
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