Caseanalysisforch.docVIP

PAGE  PAGE 2 Excel Exercises for financial statements analysis (International Accounting) 1 ABC Company Income statements December 31, 2007 and 2006 (all amounts in millions $) Accounts20072006Net sales18,11917,987Cost of goods sold6,3885,453Gross profit11,73112,534Operating expenses:Marketing, selling, and administrative3,9233,894Advertising and product promoting1,2951,299Research development2,2182,183Other expense1,794251Income before income tax25014907Income tax43573Net income$2,066$4,834 2 ABC Company’s balance sheet December 31, 2007 and 2006 (all amounts in millions $) Assets20072006Current AssetsCash 3,9785,500Other current assets5,9977,749Total current assets9,97513,249Property, plant, and equipment, net5,3214,887Intangible assets, net6,7687,203Other assets2,8102,473Total assets24,87427,812LiabilitiesCurrent liabilitiesAccount payable1,5531,478Other current liabilities6,6679,631Total current liabilities8,22011,109Long-term liabilities7,6877,628Total liabilities15,90718,737Stockholders’ EquityCommon stock2,7112,623Retained earnings other equity6,2566,452Total stockholders’ equity8,9679,075Total liabilities equity$24,874$27,812 Requirements: ① Based on the Income statements and balance sheet, Please use horizontal analysis of the comparative statements of ABC Company, make comments on the company’s performance in 2007 and give your reasons. ②Use vertical analysis of the comparative statements of ABC Company, make comments on the company’s performance in 2007 and give your reasons. ③ Draw a picture of common-size analysis of current assets and long-term assets to show the structure shifting for total assets for the past two years. ④ Based on the following common-size income statement in 2007 for ABC Company, please benchmarking against the industry average: Common-size income statement in 2007 for ABC Company Industry