For this module’s discussion please perform the following:First, go find an income statement for a...

Question

For this module’s discussion please perform the following:

First, go find an income statement for a publicly traded company.

Second, review the statement and point out something that you find interesting related to one of the “profit words” (gross profit, operating profit, net profit). If possible, please show a screen shot of the statement so that the group can see what you noticed.

Grading guideline: Initial post (6 points) and response to peer student's initial post (4 points)

Profit Reminders:

Gross Profit $ = Revenue $ – Cost of Goods Sold $

Gross Profit % = Gross Profit $ / Revenue $

Operating Profit % = Operating Profit $ / Revenue $

Net Profit % = Net Income $ / Revenue $

Here is an example:

EXAMPLE : I selected General Motors. Here is a screenshot of the three most recent years (see below). It is interesting that their operating profit (both as dollars and a percentage of net sales) has declined in the most recent year. Based on the strength of the economy I was not expecting to see this. Anyone have thoughts/ideas on why 2018 might be the worst year?

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Kushal · Accepted Answer

We are selecting the company Facebook and we will evaluate the different line items the income statement. 
As far as the depreciation expense is concerned the industry is not capital intensive and hence the fixed assets very low and depreciation expense is nil.
Gross Profit = Net revenue – Cost of revenue = 70,697 – 12770 = 57,927
Gross profit % = Gross Profit / Net revenue = 57927 / 70697 = 81.94%
Operating Profit = Net revenue – Operating expenses = 70,697 – 46711 = 23,986
Operating profit % = Gross Profit / Net revenue = 23,986 / 70697 = 33.93%
Net Profit = Net revenue – Operating expenses – Income taxes – other expense = 70,697 – 46711 + 799 – 6327= 18,485
Net Profit % = Net Profit / Net revenue = 18,485 / 70697 = 26.

For this module’s discussion please perform the following: First, go find an income statement for a publicly traded company. Second, review the statement and point out something that you find...

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