Assignment

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

Epstein, L. (2014). Financial decision making: An introduction to financial reports [Electronic version].

Article 

Ford Motor Company. (2014). Ford Motor Company 2012 annual report.

Recommended Resources Articles 

Harper, D. (n.d.). Financial statements: Cash flow.

Harper, D. (n.d). Financial statements: Earnings.

Loth, R. (2011, October). Understanding the income statement.