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Finance & Accounting
Pages 4 (1004 words)
BD 8 Trend analysis of RadioShack Corporation’s net sales, gross profit, operating income, and net income Trend analysis offers a basis for time series review of factors such as financial performance indicators. Net sales, gross income, operating income, and net income are the major items of RadioShack Corporation’s income statement and trend analysis can be conducted for developing knowledge over each item across the three years, year ended 2008, 2009, and 2010 respectively.
Slight improvements were realized from the year ended 2008 to the year ended 2009 as compared to the percentage improvements in values from the year ended 2009 to the year ended 2010 that were greater. Net sales and cost of sales increased by one percent from the year ended 2008 and by five percent and six percent respectively from the year ended 2009 to the year ended 2010. The change in gross profit from 2008 to 2009 was therefore a result of increased number of sold units because the changes in sales and cost of the sales were the same. Cost of sales however increased by a larger margin than change in net sales, in the following period, and this was a setback to trend in gross profit. It could be attributed to production inefficiencies and other sales factors (Delaney and Whittington, 2010). Even though operating income had an increasing trend over the three-year period, the pattern was slightly different from the trend in net sales and cost of sales. ...
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