(b) Analyze the income statement of Applied Materials. Write a summary that includes important points that an analyst would use in assessing the profit-ability of Applied Materials.

Applied Material, INC (AMAT /NASDAQ) Annual Consolidated Income Statement Amounts Rounded to: Millions (except per share amounts) Results for the Years Ending Oct 27, 2013 Oct 28, 2012 Oct 30, 2011 7,509 $ 4,518 2,991 469 1,320 63 8,719 $ 5,406 3,313 595 1,237 168 10,517 6,157 4,360 469 1,118 707 902 375 2,559 1,962 2,902 411 Net sales Less: Cost of goods sold Gross profit Sales, general and administrative Research and development (R&D) Restructuring, impairment, and amortization Purchased in-process R&D Other operating expenses Total operating expenses Operating profit (loss) Other income (expenses), net excluding interest expense Earnings (loss) before interest and taxes Interest expense Earnings (loss) before taxes Provision for (benefit from) income taxes Earnings (loss) after taxes Extraordinary items, net Discontinued operations, net Cumulative effect of changes in accounting principles, net Other after-tax income (loss), net 432 13 445 2,398 39 2,437 411 95 59 350 94 256 95 316 207 109 2,378 452 1,926 Net profit (loss) $ 256 $ 109 $ 1,926 Basic earnings per common share $ 0.21 $ 0.09 $ .46 Applied Material, INC (AMAT /NASDAQ) Annual Consolidated Income Statement Amounts Rounded to: Millions (except per share amounts) Results for the Years Ending Oct 27, 2013 Oct 28, 2012 Oct 30, 2011 7,509 $ 4,518 2,991 469 1,320 63 8,719 $ 5,406 3,313 595 1,237 168 10,517 6,157 4,360 469 1,118 707 902 375 2,559 1,962 2,902 411 Net sales Less: Cost of goods sold Gross profit Sales, general and administrative Research and development (R&D) Restructuring, impairment, and amortization Purchased in-process R&D Other operating expenses Total operating expenses Operating profit (loss) Other income (expenses), net excluding interest expense Earnings (loss) before interest and taxes Interest expense Earnings (loss) before taxes Provision for (benefit from) income taxes Earnings (loss) after taxes Extraordinary items, net Discontinued operations, net Cumulative effect of changes in accounting principles, net Other after-tax income (loss), net 432 13 445 2,398 39 2,437 411 95 59 350 94 256 95 316 207 109 2,378 452 1,926 Net profit (loss) $ 256 $ 109 $ 1,926 Basic earnings per common share $ 0.21 $ 0.09 $ .46