“Data suggest that economic activity has bottomed and that the worst is now being reported for corporate profits. As such, stock price gains are expected to continue, supported by improvements in corporate performance and mild-mannered inflation and interest rates.”

[Abby Joseph Cohen ]

Financial Analysis & Control
Report on Presentation

www.twelve-knights.com.nu

OPERATING AND NON-OPERATING COMPONENTS OF THE INCOME STATEMENTS
A multiple-step statement distinguishes between operating and non-operating activities. This distinction provides users with more information about a company’s income performance. On the income statement, accounting standards encourage separate treatment of operating and nonoperating items. Operating items are those relating to the day-to-day management of the enterprise: sales, cost of sales, selling, general and administrative expense, research and development costs etc. Often the net of these items is presented as a subtotal, operating income. Non-operating items include investing and financing activities, which are reported separately from operating income. Non operating items include the interest, dividends and profits on investments made in the securities of other companies; interest expense; etc. Non-operating activities consist of (1) revenues and expenses from auxiliary operations and (2) gains and losses that are unrelated to the company’s operations. The results of non-operating activities are shown in two sections: “Other revenues and gains” and “Other expenses and losses”. For a merchandiser, these sections will typically include the following items.

Non-operating Activities
Other revenues and gains Interest revenue from notes receivable and marketable securities Dividend revenue from investments in capital stock Rent revenue from subleasing a portion of the store Gain from the sale of property, plant, and