A student in your study group prepared the following reformulated income statement for the Coca-Cola Company for
Question:
A student in your study group prepared the following reformulated income statement for the Coca-Cola Company for 2007 (in millions):
Sales ................... $28,857
Cost of sales ............... 10,406
Gross margin ................ 18,451
Advertising expenses ............ 2,800
General and administrative expenses ...... 8,145
Other operating expenses (net) ........... 81
Operating income from sales (before tax) ..... 7,425
Tax ..................... 1,972
Operating income from sales (after tax) ...... 5,453
Equity income from bottling subsidiaries (after tax) . 668
Operating income .............. 6,121
Net financial expense (after tax) .......... 140
Earnings ................... 5,981
Summary balance sheets for 2007 and 2006 (in millions) were also prepared:
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You point out that the income statement fails to identify core operating income from sales. Identify core operating income from sales (after tax) and then make the following calculations. Use average balance sheet amounts in denominators where applicable.
a. Core profit margin from sales
b. Core profit margin
c. Core return on net operatingassets(RNOA)
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Average balance sheet amounts are as follows As no unusual items are reported in the in...View the full answer
