In 2022, your company is looking for an investment opportunity. The company is considering to invest in
Question:
In 2022, your company is looking for an investment opportunity. The company is considering to invest in Delta Company. The following financial information related to Delta Company for years ended 2020 and 2021:
Delta Company Income Statement in US$ | ||
31/12/2020 | 31/12/2021 | |
Sales | $500,000 | $700,000 |
Gross profit | $161,300 | $205,000 |
Selling and administrative expense | $45,200 | $74,300 |
Interest expense | $15,200 | $29,100 |
Net income | $44,100 | $45,600 |
After reviewing the income statements, your president could not determine if the investment is worth of making, so he asked you to analyze the income statements for Delta Company using the Common-Size approach and recommend to him if this investment is worth making and why?
College Mathematics for Business Economics Life Sciences and Social Sciences
ISBN: 978-0321614001
12th edition
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen