Description Case 3.3. Logitech International S.A. - Pages 150 - 153 in your text. Using the Consolidated Statements of Operations and the excerpts from the Logitech Internaional S.A., Form 10-K, analyze the profitability of Logitech. Your analysis should include the following calculations for all three years: (a) Common-size income statements (b) Effective tax rates (c) Growth rates of sales and total operating costs. After you have completed these requirements, you will be ready to provide the requested Information and answer the multiple-choice analysis questions Question 1 (1 point) Gross profit margin for 2011 as a percentage rounded to one decimal point (Example - 34.6%) was A Question 2 (1 point) Gross profit margin for 2012 as a percentage rounded to one decimal point (Example - 34.6%) was Question 3 (1 point) Gross profit margin for 2013 as a percentage rounded to one decimal point (Example - 34.6%) was Question 4 (1 point) Operating Income (Loss) for 2011 as a percentage rounded to one decimal point including a 0 (Example - 34.0%) was: Question 5 (1 point) Operating Income (Loss) for 2012 as a percentage rounded to one decimal point (Example - 34.4%) was: ^ Question 6 (1 point) Operating Income (Loss) for 2013 as a percentage rounded to one decimal point including a 0 and with parentheses for negative amounts (Example - (34.0%) was: Question 7 (1 point) Income (Loss) before Income Taxes for 2011 as a percentage rounded to one decimal point (Example-34.2%) was: A/ Question 8 (1 point) Income (Loss) before Income Taxes for 2012 as a percentage rounded to one decimal point (Example -34.2%) was: A/ Question 9 (1 point) Income (Loss) before Income Taxes for 2013 as a percentage rounded to one decimal point with parentheses for negative amount (Example - (34.2)%) was: Question 10 (1 point) Net Income (Loss) for 2011 as a percentage rounded to one decimal point (Example - 34.2%) was: Question 11 (1 point) Net Income (Loss) for 2012 as a percentage rounded to one decimal point (Example - 34.2%) was: Question 12 (1 point) Net Income (Loss) for 2013 as a percentage rounded to one decimal point with parentheses for negative amount (Example - (34.2)%) was: A/ Question 13 (1 point) Effective tax rate for 2011 as a percentage rounded to one decimal point (Example 34.2%) was: Question 14 (1 point) Effective tax rate for 2012 as a percentage rounded to one decimal point (Example 34.2%) was: A Question 15 (1 point) Effective tax rate for 2013 as a percentage rounded to one decimal point (Example 34.2%) was: A/ Question 16 (1 point) Growth rate of sales from 2011 to 2012 as a percentage rounded to one decimal point with parentheses for negative amount (Example (34.2)%) was: A/ Question 17 (1 point) Growth rate of sales from 2012 to 2013 as a percentage rounded to one decimal point with parentheses for negative amount (Example (34.2)%) was: Question 18 (1 point) Growth rate of operating costs from 2011 to 2012 as a percentage rounded to one decimal point (Example 34.2%) was: A/ Question 19 (1 point) Growth rate of operating costs from 2012 to 2013 as a percentage rounded to one decimal point (Example 34.2%) was: A/ Question 20 (1 point) Growth rate of operating costs plus COGS from 2011 to 2012 as a percentage rounded to one decimal point (Example 34.2%) was: Question 21 (1 point) Growth rate of operating costs plus COGS from 2012 to 2013 as a percentage rounded to one decimal point (Example 34.2%) was: Question 22 (1 point) Which of the following statements is correct regarding Logitech International S.A.s net sales for the periods 2011 - 2013? Sales have been decreasing at an increasing rate over the three-year period from 2011 to 2013 Sales have been increasing at a flat rate over the three-year period from 2011 to 2013. Sales have been decreasing at a flat rate over the three-year period from 2011 to 2013 Sales have been increasing at an increasing rate over the three-year period from 2011 to 2013 Question 23 (1 point) Which of the following statements is true concerning the change in gross profit margin over the three years from 2011 to 2013? Gross profit margin declined in 2012, but increased slightly in 2013. Gross profit margin increased in 2012, but declined in 2013 Gross profit margin declined in both 2012 and 2013 from the previous year. Gross profit margin was stable in 2012, but declined in 2013. All the following statements are true regarding the operating expenses from 2011 to 2013 except: There were restructuring costs in 2013 related to the video conferencing area. Operating expenses have increased all three years with a 36% increase in 2013. There was a goodwill impairment charge in 2013 related to the video conferencing reporting unit. Operating expenses have decreased all three years with a 1.1% decrease in 2012 Question 25 (1 point) All of the following are true regarding the research and development costs from 2011 to 2012 except: Research and development costs increased by 5% in fiscal 2013 compared to the prior fiscal year. Research and development (R&D) expenses declined in 2013 as workforce reductions took place due to the restructuring plan. In 2012 R&D increased due to higher personnel-related expenses and increased investments in product development for pointing devices, audio and digital home The increases in R & D in 2012 were offset partly by decreased bonuses due to lower profitability levels; lower share-based compensation expense, and cost containment efforts in consulting and outsourcing. Question 26 (1 point) Given the change in net income (loss) from 2011 to 2013, which of the following would not be a good idea for Logitech: The firm needs to determine ways to maintain good control of operating expenses. Logitech paid a substantial dividend of $0.85 per share in 2013, while not paying dividends in prior years. The firm needs to determine ways to increase the volume of sales of its products. Schedule II LOGITECH INTERNATIONAL S.A.VALUATION AND QUALIFYING ACCOUNTS For the Fiscal Years Ending March 31, 2010, 2009, and 2008 (in thousands) Balance at Charged to Write-offs Beginning of Income Charged to Balance at Description Period Statement Allowance End of Period Fiscal Year 2010 $6,705 ($ 72) ($ 763) $5,870 2009 Allowance for doubtful accounts Allowance for doubtful accounts Allowance for doubtful accounts $2,497 $ 5,102 ($ 894) $6,705 2008 $3,322 $ 603 $(1,428) $2,497 2013 2012 2011 $ 27 89 .. Note 4. Other Expense (en millions) Expense (income) Net foreign currency exchange losses. Financing fees and financial instruments Royalty income Interest income General and product liability-discontinued products. Net gains on asset sales Miscellaneous (47) (16) $118 56 (51) (41) 15 (8) 8 $.97 $ 26 156 (38) (17) 8 (25) 29 S 139 21 (16) 15 $ 73 Consolidated 2013 2012 2011 35.0% (24.7) (0.7) 35.0% (125) 35.0% (10.4) 9.3 U.S. federal statutory income tax rate Tax on global activities including exports NBCU gain Business Property disposition U.S. business credits All other net (1.9) (2.6) (3.6) (1.8) (30.8) 4.2% (3.2) (22) (6.5) 28.5% (20.4) 14.6% Actual income tax rate Year Ended December 31 2013 2012 2011 Net sales Loss from discontinued operations Income tax benefit (expense) Gain on sale of discontinued operations Income tax expense on sale Income from discontinued operations $ 0 $ 7 (75) 201 0 $ 133 $ 0 $ (141) 218 930 0 $ 1,007 $ 13,945 $ (13,971) 1,299 68,745 (11,773) $ 44,300