Financial Statement Analysis The comparative income statements and balance sheets for Montana Corporation for the years ending December 31, 2009 and 2008, are given here.

Required:
Prepare a comprehensive financial statement analysis of Montana Corporation for 2009. Note that though financial statement analysts usually compare data from two or more years, we are more concerned here with the methods of analysis than the results, so we will use only one year, 2009.

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Montana Corporation Income Statements For the Years Ended December 31, 2009 and 2008 2009 2008 Net sales $600,000 $575,000 Cost of goods sold Gross margin 500,000 $100,000 460,000 $115,000 Expenses: Selling and administrative expenses $ 66,000 Interest expense 4,000 Total expenses Income before taxes Income taxes Net income Earnings per share $ 70,000 $ 30,000 12,000 $ 18,000 $1.80 $ 60,000 3,000 $ 63,000 $ 52,000 21,000 $ 31,000 $3.10