Q1. For Apple Computer, use amounts listed below to complete the trend indexes for Income before income tax and the lines below. Divide each amount by the amount for the base year. Record the resulting trend index in the shaded area. Use FYE 9/29/2007 as the base year.
Q2. Sales growth was 172% (272–100) from FYE 9-29-2007 to FYE 9-25-2010 with the greatest increase during FYE (_________ / 9-26-09 / 9-27-08 / 9-29-07 ). When sales revenue increases, expenses would be expected to (_________/ stay the same / decrease). It is favorable when sales revenue increases by 172% and expenses increase at a (higher / _________) rate than 172%. If an expense account increases at a rate greater than sales revenue, this indicates costs (were kept under control / _________).
Q3. From FYE 9-29-2007 to FYE 9-25-2010, which of the following expenses increased at a greater rate than sales revenue? (COGS / Operating expenses / _________). For Apple, the most important cost to keep under control is (_________/ operating expenses / provision for income tax). Overall, it appears that Apple costs (_______________/ got out of control).
Q4. The FYE 9-25-2010 trend index for Sales Revenue of 272 is (_________/ less) than 100, indicating the amount for that year is (about the same as / almost double / __________________) the (_________/ previous year) amount. The FYE 9-25-2010 trend index for Net Income of 401 is (_________/ less) than 100, indicating the amount for that year is (about the same as / double / _________) the (_________/ previous year) amount. (Sales revenue / _________) increased at a greater rate, indicating (_________ / expenses) increased at a greater rate from FYE 9-29-2007 to FYE 9-25-2010, which is (_________ / unfavorable).
Q5. The annual revenue growth rate can be compared between companies.
Assume less than 5% is low, 5 to 15% is moderate, and more than 15% is high.
The three-year average revenue growth rate is (low / moderate / _________). (172% / 3 years = 57% >15%
Q6. Compute gross profit margin (Gross profit / Sales revenue) for fiscal years ended:
9-25-2010 _________; 9-26-2009 _________; 9-27-2008 _________; 9-29-2007 33.97%
During this time period the gross profit margin (_________ / decreased), which is a(n) (_________ / unfavorable) trend. What does this trend indicate?
Q7. Compute the Return on Sales (Net income / Sales revenue) for fiscal years ended:
9-25-2010 _________; 9-26-2009 _________; 9-27-2008 _________; 9/29/2007 14.56%
During this time period ROS (_________/ decreased), which is a(n) (_________/ unfavorable) trend. What does this trend indicate?
Q8. Operationally, the best year was FYE (_________ / 9-26-09 / 9-27-08 / 9-29-07). Why? List as many items as you can to support your response.
Q9. Operationally, the worst year was FYE (9-25-10 / 9-26-09 / 9-27-08 / _________). Why? List as many items as you can to support your response.
Q10. It is easier to analyze Apple (before / _________) preparing the trend analysis. Why?
The trend analysis allows the rate of increase to be compared among accounts.