employees and in turn, his salary expense will increase. As expected, taxes, rent, depreciation, leasing, insurance and interest follow. In the year 2008, Tim’s Coffee Shoppe earned $400,527 while his total expenses were $326,016. This leaves Tim with a net income of $74,511. So the question is asked, will Tim’s business grow and increase if other businesses move into the area? It doesn’t look like any of Tim’s expenses will be decreasing due to the increase in his business. Tim’s current income statement
Words: 359 - Pages: 2
LEVERAGE Operating leverage measures how a given percentage change in sales affects net operating income. It is a measure of volatility in net income caused by high fixed expenses relative to variable expenses. [pic] Use the income statements for Company X and Y to compute: a. Breakeven point in units and sales dollars. b. Margin of safety. c. Degree of operating leverage. d. The change in net income caused by a 10% increase in sales. |
Words: 287 - Pages: 2
quarterly earnings pattern every year. According to company policy, variances are taken directly to the income statement as an adjustment to cost of goods sold. Favorable variances have the effect of increasing net operating income, and unfavorable variances have the effect of decreasing net operating income. Lansing had rigged the standards so that there were always large favorable variances. Company policy was a little vague about when these variances have to be reported on the divisional income
Words: 498 - Pages: 2
Dell no longer sees its business as making and selling PCs , focusing instead on enterprise IT. The claim follows Dell posting full-year results showing growth in enterprise, but a struggle in consumer sales. Speaking at the launch of new enterprise hardware at an event in Twickenham, West London today, the president of Dell's enterprise solution group Brad Anderson said: "We're no longer a PC company, we're an IT company." "Dell's changing very quickly," he added. "We are dramatically changing
Words: 308 - Pages: 2
Per Unit | | | | | | Sales | | | $600,000 | $40 | | | | | | Variable expenses | | 420,000 | $28 | | | | | | Contribution margin | | $180,000 | $12 | | | | | | Fixed expenses | | | 150,000 | | | | | | | Net operating income | | $30,000 | | | | | | | | | | | | | | | | | | | | | | | | | | 1. What is the monthly break-even point in units sold and in sales dollars? | | | | | | | | | | | | | | | | | Sales
Words: 546 - Pages: 3
Plank began selling tight-fitting base layer tops and bottoms from his corporate headquarters in his grandmother’s basement. Twelve years later, Under Armour has grown into an internationally recognized leader in high performance athletic clothing. Net incomes have grown exponentially since the company’s inception.  Under Armour has fed this growth with strategic partnerships with the NFL, college football teams, and numerous star athletes. The company has
Words: 1194 - Pages: 5
as the leverage of the company and capital structure (Investopedia, 2013) . The income statement shows the components of profit and loss for a certain accounting period. It will typically also show subtotals for gross profit, operating income, and net income after taxes. Normally this is shown over a quarter or fiscal year (Investopedia, 2013). The statement of owners’ equity shows the activity with the company’s owners for a specified period of time. It will also show changes in assets and liabilities
Words: 519 - Pages: 3
is also used in the life of business. This paper will give a brief description of advances in information technology as it relates to ethical issues and the development of two acts: Children’s Internet Protection Act- 2000, and No Electronic Theft (NET) Act- 1997. Children’s Internet Protection Act The internet has become a very critical tool for children’s learning and success. It has become a threshold to a variety of expression and skills; however, while positive avenues are available to children
Words: 754 - Pages: 4
2012 Half Year Results Basel: July 26, 2012 Safe harbor This document contains forward-looking statements, which can be identified by terminology such as ‘expect’, ‘would’, ‘will’, ‘potential’, ‘plans’, ‘prospects’, ‘estimated’, ‘aiming’, ‘on track’ and similar expressions. Such statements may be subject to risks and uncertainties that could cause the actual results to differ materially from these statements. We refer you to Syngenta's publicly available filings with the U.S. Securities and
Words: 1698 - Pages: 7
is 40%. Berndt has no debt. a. Construct an income statement. What is Berndts expected net cash flow? Solution: computation of the following The income statement is expected net cash flow Sales 12,000,000 Costs other then depreciation 9,000,000 75% of sales Depreciation 1,500,000 Income before tax 1,500,000 Tax (40%) 600,000 Net Income 900,000 Net cash flow = net income + depreciation (since depreciation is non cash) = 900,000 + 1,500,000
Words: 299 - Pages: 2
