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Scenario Financial measure Effect 1. A company found a new supplier at the end of the year, effectively decreasing its cost of goods sold for
Scenario Financial measure Effect 1. A company found a new supplier at the end of the year, effectively decreasing its cost of goods sold for the current year. Operating profit margin Increase 2. A company incurred $500,000 in marketing expenses for a 5-year marketing program. Sales in the current year increased by $250,000. Return on investment Decrease 3. A company retired a portion of its long-term debt by issuing new common stocks. The imputed interest rate is unchanged. 4. A company increased its cash dividends per shares by $0.05 in the current year. 5. A company had the same performance as the previous year except that it issued preferred stock in the current year. 6. A company revised its income statement to reflect an increase in tax expense due to an error in computing its taxable operating income but not its tax rate
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