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Perplexed by the declining profit margin and the rate of growth of EASY's net income, Melissa Hampton pressed the company management for more detailed information.

The management asks you, one of EASY's financial analysts, to compute component and percentage changes for the following statements and determine if there were any positive or negative trends.

EASY CHAIR COMPANY INCOME STATEMENT (dollars in millions)







2000

1999

1998

1997

Net sales

$592.3

$553.2

$486.8

$420.0

Cost of sales

(430.4)

(397.8)

(352.1)

(289.8)

Gross profit

161.9

135.4

134.7

130.2

Selling, general, and administrative expenses

(111.6)

(106.9)

(91.4)

(85.5)

Income from operations

50.3

48.5

43.3

44.7

Interest expense

(7.2)

(7.6)

(4.0)

(1.9)

Other income

2.5

3.1

2.7

2.1

Income before taxes

45.6

44.0

42.0

44.9

Taxes

(17.3)

(16.5)

(15.5)

(20.3)

Net income

$28.3

$27.5

$26.5

$24.6

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92743804

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