subject: financial statement analysis Act 450

Summer 2021 QUESTION 1-(25 pts) List at least five risk factors that may affect the financial success of an airline company. And discuss how each of these five factors may affect the profitability of the business (400 words) QUESTION 2- (15 pts) Discuss how financial statements reflect the results of business activities. Note: Don't forget to give references to three business activities in your discussion. (250 words) QUESTION 3- (25 pts) Income statement of ABC company is given below: Sales Revenue COGS (-) Gross Profit Operating Expenses (-) Net Profit 2019 2018 2017 $9,000 $7,500 $6,000 5,000 4,500 4,000 4,000 3,000 2,000 2,800 1,200 1,000 1,200 1.800 1,000 a) Show the index-trend percentages for three-year period taking 2017 as the base year. (Show supportive calculations) (10 pts) b) First comment on the trends of each item and write your conclusion whether overall trends are Favorable or Unfavorable. (15 pts, 150 words)