XYZ Company Year ended December 31, ($ thousands)

2019 2018

Cost of sales $ 5,400 6,200

Financial income/(expenses), net 260 280

Gains from discontinued operations, net of tax 1,800 -

Gains on sales of PPE & investments 6,000 1,000

Income tax expense 390 400

Net sales 11,200 16,000

Research and development 500 480

Selling, general and administrative expenses 4,500 3,600

Provided the above accounts related to XYZ Company, kindly:

1- Prepare a classified Income statement. You can use the template provided below.

2- Assume XYZ Company has the following: - 1,000,000 shares of common stock outstanding at the beginning of 2019 and 200,000 shares are issued on June 1, 2019. - 80,000 shares of convertible preferred stock outstanding - No other potentially dilutive securities Each share of preferred pays a dividend of 10$ per share, and each is convertible into 5 shares of the companys common stock. Calculate the companys basic and diluted EPS for 2019 (show all calculations).

3- Compute the percentage of change of every account and balance (including the totals and subtotals) between years 2018 and 2019. Analyze the major changes and explain what could cause such changes (use 10% as a threshold).