Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 89

Income statement analysis Refer to the income statement in the annual report you have obtained either as a result of completing Exercise 1.1 or otherwise.

Required:

a. Which method, single-step or multiple-step, is used in the statement?

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b. Calculate the gross profit ratio for the years reported.

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c. Is operating income increasing or decreasing for the years reported?

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d. Does the company report any unusual items? If so, what are the effects of these items on net income and earnings per share?

Step 1 of 12