You are the Chief Accountant at a company and the CEO has asked you to explain why net income is decreasing despite sales increasing. You should prepare a chart from the information provided and write a short memo (five sentences) explaining what your chart shows, how it could be a possible explanation, and what further analysis you would recommend. (Note this is not necessarily fraud related)

Create a new worksheet

• Open up Excel and create a blank workbook and save it
• From blackboard (Extra credit) open the part II spreadsheet
• Copy and paste the data into the new spreadsheet that you have just created. Remember to put your name on the spreadsheet

Create a chart

Create a chart that compares the net income, wages and overtime from 2005 to 2016. Ensure that the chart has a title, axis labels, and a legend showing the series labels for net income, and wages and overtime. The y axis should be labeled USD, the x axis year.

Create a word document

Create a memo in the following format

MEMORANDUM

To:

From:

Date:

Subject: Sales increases and Net Income decreases

In response to your request for an explanation for the decrease in net income when overall sales are increasing, please find below chart showing trends in net income, wages and overtime. (use this sentence)

(Insert your chart by copying and pasting your chart from excel. Note that there are several paste options that will make your chart behave in different ways)

(After the chart, write a further 5 sentences providing your explanation of possible causes, further analysis required and recommended actions)

____________________________________________________________________________________________________________________________

Year Ending	Net Income	Wages	Overtime	Sales
	$	$	$	$
2005	50,000	60,000	0	1,000,000
2006	60,000	65,000	0	1,050,000
2007	70,000	70,000	0	1,100,000
2008	80,000	75,000	0	1,150,000
2009	90,000	80,000	0	1,200,000
2010	100,000	85,000	0	1,250,000
2011	100,000	85,000	5,000	1,300,000
2012	98,000	85,000	10,000	1,350,000
2013	95,000	85,000	15,000	1,400,000
2014	92,000	85,000	20,000	1,450,000
2015	89,000	85,000	25,000	1,500,000
2016	85,000	85,000	30,000	1,550,000