subject financial statement analysis Act 450

QUESTION 3- (25 pts) Income statement of ABC company is given below: Sales Revenue COGS (-) Gross Profit Operating Expenses (-) Net Profit 2019 2018 2017 $9,000 $7,500 $6,000 5,000 4,500 4,000 4,000 3,000 2,000 2,800 1,200 1,000 1,200 1,800 1,000 a) Show the index-trend percentages for three-year period taking 2017 as the base year. (Show supportive calculations) (10 pts) b) First comment on the trends of each item and write your conclusion whether overall trends are Favorable or Unfavorable. (15 pts, 150 words) QUESTION 4- (15 pts) Evaluate the below trend in Sales and COGS of company XYZ considering the following inflation rates in the country. 2018 Sales Cost of goods sold 2019 130 120 110 108 2017 100 100 Inflation increased by 5 % from the end of 2017 to the end of 2018. Inflation increased by 15 % from the end of 2018 to the end of 2019