Below are the income statements for the Spanish Hoyos Group. The company asks you to analyse these statements and answer the following questions:
(a) What is your opinion of the company?
(b) Is the company moving closer towards or further away from breakeven point?
(c) In your view, is the company in a period of heavy capital expenditures?
(d) What choices are made with regard to cost control?
(e) Explain the rise in financial expense.
|
Grupo Hoyos
|
1
|
2
|
3
|
|
Sales
|
82,000
|
92,000
|
97,000
|
|
Change in finished goods and in-progress inventory
|
500
|
1,400
|
2,800
|
|
Operating revenues
|
82,500
|
93,400
|
99,800
|
|
Purchases of raw materials and goods for resale
|
24,800
|
27,400
|
29,900
|
|
Change in inventories
|
-1,700
|
-500
|
-1,600
|
|
Other external charges
|
20,200
|
23,000
|
23,500
|
|
Taxes
|
1,200
|
1,400
|
1,500
|
|
Personnel cost
|
29,000
|
33,000
|
37,000
|
|
Depreciation and amortisation
|
5,200
|
4,900
|
4,800
|
|
Provisions
|
100
|
200
|
-
|
|
Operating charges
|
78,800
|
89,400
|
95,100
|
|
Operating income
|
3,700
|
4,000
|
4,700
|
|
Interest, dividends and other financial income
|
300
|
400
|
300
|
|
Interest and other finance charges
|
2,300
|
2,900
|
3,900
|
|
Financial income
|
-2,000
|
-2,500
|
-3,600
|
|
Nonrecurring income
|
-100
|
-100
|
+100
|
|
Tax
|
800
|
700
|
600
|
|
Net income
|
800
|
700
|
600
|