Questions & Exercises

Questions & Exercises - Seminar One Questions and...

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Seminar One Questions and Exercises 1. What is the advantage of using comparative statements for financial analysis rather than statements for a single date or period? Financial statements presenting financial data for two or more periods are called comparative statements. Comparative financial statements usually give similar reports for the current period and for one or more preceding periods. They provide analysts with significant information about trends and relationships over two or more years. Comparative statements are considerably more significant than single date or period statements. Comparative statements highlight the fact that financial statements for a single accounting period are only one part of the constant history of the company. Exercise 9-1 a. ROG AN TEC HNO LOG IES CO. Com parati ve Inco me State ment For the Years Ende d Dece mber 31, 2010 and 2009 2010 2009 Amo unt Perce nt Amo unt Perce nt Sales $ 500,0 00 100.0 % $ 440,0 00 100.0 % Cost 65.0 55.0
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of good s sold 325,0 00 % 242,0 00 % Gross profit $ 175,0 00 35.0 % $ 198,0 00 45.0 % Sellin g expe nses $ 70,00
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