SEC 10K: Income Statement - COSTCO

Locate the income statement in your companys most recent 10-K, and respond to the following questions. Sometimes the income statement is called Consolidated Statements of Earnings, Consolidated Statements of Operations, or something similar.

http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTEwNTI0MTM0JkRTRVE9MCZTRVE9MCZTUURFU0M9U0VDVElPTl9FTlRJUkUmc3Vic2lkPTU3#sD5DA86177F33EC84CEA9D3EF14FC1730

By the way, you should ignore the Statement of Comprehensive Income because that's a financial statement covered in more advanced accounting classes. We won't be doing anything with that statement in our introductory accounting class.

Category: Revenue and Net Income

Identify the following amounts for the two most recent years:

Net Sales (or Total Sales if your company has more than one source of revenue) Some companies use the term Revenue instead of Sales.

Cost of Goods Sold (aka Cost of Products, Cost of Sales, Cost of Services, etc.)

Gross Profit (aka Gross Margin)

Category: Analysis

Calculate the following ratios (show and label your calculations) for the two most recent years and comment on the results of your ratio analysis.

Gross profit margin = Gross profit Net sales 100

Net profit margin = Net income Net sales 100

Example: Johnson & Johnson (J&J)

Use this example as a guide for answering these discussion questions for your company. For this example, please refer to the J&J's Consolidated Statements of Earnings on page 21 of its 2014 10-K.

		2014	2013	Calculation
	Sales to customers	$74,331	$71,312	amount given in 10-K
	Cost of products sold	22,746	22,342	amount given in 10-K
	Gross profit	$51,585	$48,970	Sales Cost of products sold

And here are J&Js ratios:

	2014	2014 Calculation	2013	2013 Calculation
Gross profit margin	69.4%	51,585 74,331 100	68.7%	48,970 71,312 100
Profit margin	22.0%	16,323 74,331 100	19.4%	13,831 71,312 100