ASHFORD OMM622 WEEK 3 discussions 1 and 2

Discussions
To participate in the following discussions, go to this week's Discussion link in the left navigation.

1. Income Statement
   
   Referencing this week’s readings and lecture, address the following:
   
   
   • What are the two causes of an increasing or decreasing sales number?
   • Discuss all the reasons that might explain an increase or decrease in gross profit.

   Respond to at least two of your classmates’ posts.

2. Analyzing an Income Statement
   
   Income statements are presented in the table below for the Elf Corporation for the years ending December 31, 2010, 2009, and 2008. Write a one-paragraph analysis of Elf Corporation’s profit performance for the period. Create a common-sized income statement for the three years. What conclusions can you draw from the different parts of the statement? What are the causes and effects of Elf's performance for those three years?
   
   Elf Corporation Income Statements for the Years Ending December 31

(in millions)	2010	2009	2008
Sales	$700	$650	$550
Cost of goods sold	350	325	275
Gross profit	350	325	275
Operating Expenses:
Administrative	100	100	100
Advertising and marketing	50	75	75
Operating profit	$200	$150	$100
Interest expense	70	50	30
Earnings before tax	$130	$100	$ 70
Tax expense (50%)	65	50	35
Net income	$ 65	$ 50	$ 35

Respond to at least two of your classmates’ posts.