based not only upon getting correct answers, but also upon how well you demonstr
ID: 2396262 • Letter: B
Question
based not only upon getting correct answers, but also upon how well you demonstrate the depth and breadth of your knowledge and understanding of the material. A discussion of the material, not one or two word answers, is what is expected and upon what you will be graded 2016 (current year) 2015 %of |Sales| (prior yearl %of $ |Sales % change Net sales 62349545 5140217482.4%[21010605 6065 10947371 17.6%) 506198019.4% 139.1% 144.6 116.3% 455.2% st of Goods Sold Gross Profit Advertising General & Administrative Total Operating Exp 1818126 327479 1 806733112.9994162 93.8 98854571 5.9% 4489887 17.2% 120.2% ncome from Operations nterest Income Gain on Marketable 061914 1 17977 0 2.2%) 85.6% 16237 0.1 ties 0.0% 41962 0.2% -100.0% 2400|OON? -3164 00%1- 55015 0 nterest Expense otal Other ncome Before Taxes 15577. 77491 17 627108 24 536143 0 24.6% 71.7 71.8 233.0% 16.1% 2.4%) 1610001 0.6% 10 0.9% 4661 Answer the following questions in your evaluation: Answer questions 5 to 12 l have the answers for 1 to.4 their impact 5. Is the change in advertising likely to be long term? Why 6. What impact did the new sales have on G&A; (General & Administrative]? Why? 7. Are total operating expenses up or down as a percentage? 8. What impact does the change in operating expenses have on the bottom line? 9. Is income from operations up or down ($ & %)? 10 Is total other a significant dollar amount? Percentage increase? 11 Look at the amount of taxes paid. Why is the change so significant? 12. Compare the increases in sales to the increase in profit after taxes. Was it worth it from an operations point of view? From the stockholders point of viewExplanation / Answer
5. The Change In advertising is likely to be long term because the amount is of advertising expenses compared to last year in % is doubled that why it is likely that the change in advertising is long term.
6. Due to the new sales it can be clearly see that the general and administration are working more efficently comapared to last year.
7. The total opearting expenses has gone down even though the advertising expenses has been doubled because of more efficently working of general and administration the operating expenses has gone down compared to sales.(general and admin have fixed salary and some part of there income is variable that why as the sales increased the fixed cost remained the same and the variable cost increased but it did not increase significantly that why operating expenses has gone down compared to previous year)
8. As the increase in the advertising cost significantly compared to the last year the profit of the company has directly decreased by 1.6%.
9. Income from operation has gone down compared to last year.
10. Another significant dollar amount will be gain from marketable securities gas gone completly to 0% compared to last year and taxes has also gone up by 233% compared to last year.
11. Because of the increase in income company has gone from one tax rate to another. They have gone from 25.67% to 50% approximatly.
12. From operation point of view every increase in net income from increase in sales is good but from the stakeholder point of view by increasing 139% in sales your profit increase only by 16.1% that means company have problems and it is not good from stakeholders point of view.
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