Week 2 discussion

Income Statement Analysis Name Institution Course Instructor Date Income Statement Analysis 1. Income Statement from Coca-Cola’s latest annual report 2. Last Name Starts With Line Item Ratios B Revenue Gross Profit % Earnings Per Share 3. Revenue Revenue, also known as Sales or Income, is the amount of all sales of services and goods a company realizes at a particular time (CFI Team, n.d. a). This value is obtained using a formulation that depends on what the company provides, goods or services. Understanding revenue is important for management because it reflects the company's market demand and pricing power. Revenue formula: For Goods = (No. of Goods Sold) * (Avg. Price) For Services: = (No. of Customers) * (Avg. Price of Services) Gross Profit % Gross profit margin ratio is a profitability ratio that analyses a company's gross margin to its revenue (Corporate Finance Institute, n.d.). It illustrates a company's profit after repaying its cost of goods sold. This is important to management because it implies the effectiveness of the company's production and pricing strategies. Formula: Gross profit margin = (Gross Profit ÷ Total Revenue) * 100 Earnings Per Share (EPS) EPS is a fundamental ratio used to establish the shareholder...