ASSIGNMENT 4 Completed by Reviewed by

THE INCOME STATEMENT

1. Locate the companys income statement.

Income Statement Date: __________________

Page on which income statement appears: _________

What is the period covered by the income statement? _________________________

2. How does the net income for this year compare to last? What caused the change, use the notes to the income statement to support your reason?

3. What are the accounts (not totals, but accounts i.e. net income is a total, wage expense is an account) that catch your attention compared to the previous year's income statement? List at least 3 and briefly explain why you selected each one. (Total Expenses or Net Income are not accounts, they are totals or labels for totals.) Explanation must say more than the figure increased or decreased, why would that be of interest?

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4. What could explain the changes from one year to another for each account selected in number 2? Your answer explains the why it changed, not how much it changed. Your reasons must be supported by data provided in the companys annual report.

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5. Calculate the companys Profit Margin for both this year and the prior year.

Show your computations and then the result. Present the figure correctly; each ratio has a specific format.

The Equation for Profit Margin is: ___________________

This year: = ___________________ (show your work) = ____________ (result)

Late year: = ___________________ (show your work) = ____________ (result)

Explain what information this result provides. Use complete sentences.

Has the result improved or worsened? Explain your answer and add your comments on the results. Use complete sentences. Use the annual report notes to support your reason.