• Interpret the quality of the income statement for this company. Is the income statement improving or deteriorating over time? Explain your answer, including why you reached your conclusion. (75–150 words, or 1–2 paragraphs)
• Describe whether or not this company is profitable. If the company is unprofitable, explain if it is growing fast enough for sales to outpace expenses. (75 words, or 1 paragraph)
• Based on their income statement, would you invest in the company? (75 words, or 1 paragraph)

 

Income statement 2016 2017 Cost of Goods Sold S201,943 S252,768 Gross Profit Selling & Administrative Expenses Depreciation Operating profit 201,943 252,768 43,130 53,753 56,876 64,826 S301,949 S371,347 Interest expense 13,130 14,925 Net Operating Income S315,079 S386,272 Tax Rate 35% 110,278 135,195 Income after taxes S204,801 S251,077 Dividend Payout 50% Retained Earnings s102,401 S125,538 102,401 125,538