Financial analysis

Financial analysis

Preparation the Income statement

Income statement of the company shows how successfully the firm has been able to operate successfully in a given accounting period. The preparation of income statement for any company takes the analysis of the profits, as well as, the study of losses and expenses in a given accounting period. The income statement for the company is given as under;

Sales revenue

$586,000

Less: Cost of goods sold

(307000)

Gross income

$279,000

Less: general, selling and administrative expense

Marketing expense

($4500)

Rent Expense

($28,000)

Utilities expense

($ 6,700)

Insurance expense

($ 1,400)

Salaries expense

($78,500)

Depreciation expense

($24,350)

Earnings before Taxes

$135,550

Property taxes

($28000)

Net Income

$107,550

Preparing the balance sheet

Balance sheet shows three sides of accounting equation, that is, assets, ...