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1/ Analysts use financial statements for their analysis for all of the following reasons except
a/ corporate performance.
b/ employee satisfaction.
c/ lending decisions.
d/ risks related to the investment.
2/ Consider the following income statement data for Barolo Inc.:
| | 2020 | | 2019 |
| Sales revenue | $97,300 | | $86,200 |
| Less: Cost of goods sold | 45,600 | | 53,400 |
| Gross profit | 51,700 | | 32,800 |
| Less: Selling and administration costs | 22,500 | | 18,300 |
| Net Income | $29,200 | | $14,500 |
Based on common-size analysis, which of the following statements is correct?
a/ The increase in sales revenue in 2020 was caused by higher selling and administrative expenses.
b/ The company's cost to sales ratio improved in 2020.
c/ The increase in gross profit in 2020 was due to increased sales.
d/ Net income as a percent of sales declined in 2020.
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