Chapter 11
Financial Statement Analysis
557
Analysis
Book value per share is rarely equal to the selling price of the share on the stock market. What
are some factors that could cause the market value to differ from the book value?
AP-15A (
4
)
Below is select financial statement information for Rock Co. and Roll Inc.
Rock Co.
Roll Inc.
Sales
$348,500
$465,800
Cost of Goods Sold
106,293
160,701
Gross Profit
242,208
305,099
Expenses
Operating Expense
52,275
69,870
Depreciation Expense
34,850
46,580
Advertising Expense
17,425
23,290
Interest Expense
15,683
37,264
Total Expenses
120,233
177,004
Net Income before Taxes
121,975
128,095
Income Tax Expense
62,730
83,844
Net Income
$59,245
$44,251
Cash
$14,850
$19,800
Accounts Receivable
25,000
22,500
Inventory
34,500
43,125
Equipment
85,800
81,510
Total Assets
$160,150
$166,935
Accounts Payable
$27,500
$24,750
Unearned Revenue
17,800
19,580
Long-Term Liabilities
29,350
62,925
Shareholders' Equity
85,500
59,680
Total Liabilities and Shareholders' Equity
$160,150
$166,935
