Solution-Create a common-sized income statement for the

Create a common-sized income statement for the three years

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Reference no: EM131506767

Discussion: Financial Decision Making

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 Corporation's 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

Reference no: EM131506767

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Create a common-sized income statement for the three years

Reference no: EM131506767

Reference no: EM131506767

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