Prepare a horizontal analysis income statement for lucent

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Reference no: EM13535374

The telecommunications industry suffered a severe business downturn during the early part of this decade. Lucent Technologies is one of the major equipment providers to this industry. At the top of the next page are the comparative income statements for Lucent Technologies for the fiscal years ended September 30, 2001 and 2000.

1. Prepare a horizontal analysis income statement for Lucent Technologies.

2. Interpret your analysis.

Lucent Technologies Inc.

Consolidated Statements of Income

For the Years Ended September 30, 2000 and 2001

 

In millions

 

9/30/01

9/30/00

Revenues

$ 21,294

$28,904

Costs

19,236

17,190

Gross profit

$ 2,058

$11,714

Operating expenses:

 

 

Selling, general and administrative

$ 7,410

$ 5,610

Research and development

3,520

3,179

Other operating and restructuring expenses

10,157

559

Total operating expenses

$ 21,087

$ 9,348

Operating income (loss)

$(19,029)

$ 2,366

Other income (expense)-net

(357)

333

Interest expense

518

342

Income (loss) from continuing operations before

 

 

income tax expense (benefit)

$(19,904)

$ 2,357

Income tax expense (benefit)

(5,734)

924

Income (loss) from continuing operations

$(14,170)

$ 1,433

Reference no: EM13535374

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