The following consolidated income statements and balance sheets are available for Azure Inc.:
Azure Inc.
consolidated income statements

Azure Inc.
Consolidated Balance Sheets

Required:
1. Explain why income from operations decreased in 2018 and 2019 while sales increased.
2. Determine whether the proportion of resources invested in the various asset categories changed from 2017 to 2019.
3. Determine whether the proportion of capital supplied by creditors changed.
4. Indicate from what sources Azure secured the capital to finance its increase in current assets in 2019.

Transcribed Image Text:

Year ended December 31, 2019 2018 2017 Amount Amount Amount $901,170 100.0 $728,035 100.0 $661,850 100.0 Revenues Costs and expenses: Cost of goods sold Selling and administrative $539,801 318,113 17,122 9,913 $884,949 $ 16,221 4,506 $ 11,715 59.9 $439,005 60.3 $401,743 35.3 206,034 28.3 176,052 18,201 2,912 98.2 $666,152 91.5 $593,679 60.7 26.6 Interest 1.9 2.5 17,208 (1,324) 2.6 (0.2) 89.7 Other expenses (income) Total costs and expenses Income before provision for income taxes Provision for income taxes 1.1 0.4 1.8 $ 61,883 8.5 $ 68,171 10.3 0.5 22,569 23,827 5.4 $ 44,344 3.1 3.6 1.3 $ 39,314 Net income 6.7 December 31, 2019 2018 2017 Amount Amount Amount ASSETS $147,129 31.4 $ 62,417 14.3 $ 66,927 95,589 21.9 57.8 261,015 59.8 241,519 17,459 $468,565 100.0 $436,480 100.0 $415,695 100.0 Current assets 16.1 Investment 91,453 30,925 270,831 19,680 6.6 22.0 Property, plant, and equipment (net) Other assets 58.1 4.2 4.0 15,796 3.8 Total assets LIABILITIES AND STOCKHOLDERS' EQUITY $ 68,410 152,284 $220,694 14.6 $ 29,244 32.5 162,807 47.1 $192,051 $183,209 39.1 $182,332 62,097 52.9 $244,429 6.7 $ 28,683 152,976 44.0 $181,659 41.8 $171,266 41.2 62,770 56.0 $234,036 Current liabilities 6.9 Long-term debt 37.3 36.8 Total liabilities 43.7 Common stock Retained eamings Total stockholders' equity Total liabilities and stockholders' equity 14.2 64,662 $247,871 13.8 15.1 56.3 $468,565 100.0 $436,480 100.0 $415,695 100.0