1. The following calculations have been made for ABC Company - CALCULATIONS REQUIRED
Growth rate
2013 to 2014
Net sales 10.5%
Total accounts receivable 21.3%
Allowance for doubtful accounts 2.6%
Allowance for doubtful accounts as a
percentage of total accounts receivable
2014 3.8%
2013 5.4%
Analyze the accounts receivable and allowance for doubtful accounts changes and provide plausible explanations for the results.
2. Analyze the common size income statements below - CALCULATIONS REQUIRED
|
2014
|
2013
|
|
Net sales
|
100%
|
100%
|
|
Cost of goods sold
|
55
|
60
|
|
Gross profit
|
45
|
40
|
|
Operating expenses
|
|
|
|
Research and development
|
14
|
20
|
|
Selling, general and administrative
|
5
|
9
|
|
Restructuring, asset impairments and other charges
|
1
|
8
|
|
Total operating expenses
|
20
|
37
|
|
Income from operations
|
25
|
3
|
|
Interest expense
|
1
|
1
|
|
Income before income taxes
|
24
|
2
|
|
Provision for income taxes
|
3
|
1
|
|
Net income
|
21%
|
1%
|
|
Sales revenue increase, 2013 to 2014
|
80%
|
|
|