Writing Skills Problem
Income statements are presented for the Elf Corporation for the years ending December 31, 2013, 2012, and 2011.
Elf Corporation Income Statements for the Years Ending December 31, 2013, 2012, and 2011
|
(in millions)
|
2013
|
2012
|
2011
|
|
Sales
|
$700
|
$650
|
$550
|
|
Cost of goods sold
|
350
|
325
|
275
|
| Gross profit Operating expenses: |
$350 |
$325 |
$275
|
|
Administrative
|
100
|
100
|
100
|
|
Advertising and marketing
|
50
|
75
|
75
|
|
Operating profit
|
$200
|
$150
|
$100
|
|
Interest expense
|
70
|
50
|
30
|
|
Earnings before tax
|
$130
|
$100
|
$ 70
|
|
Tax expense (50%)
|
65
|
50
|
35
|
|
Net income
|
$ 65
|
$ 50
|
$ 35
|
Required: Write a one-paragraph analysis of Elf Corporation's profit performance for the period.
To the Student: The focus of this exercise is on analyzing financial data rather than simply describing the numbers and trends. Analysis involves breaking the information into parts for study, relating the pieces, making comparisons, drawing conclusions, and evaluating cause and effect.