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Essay / Research Paper Abstract
This 4 page paper looks at the income statement for Kodak Eastman for the years 2005 – 2007 and performs a financial analysis on the firms profitability. The analysis includes assessment of the gross, operating and net profit as well as the earnings per share. All calculations are shown. The bibliography cites 4 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEkodakIS07.doc
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Unformatted sample text from the term paper:
established. The income sheet, which shows revenue and expenditures, may be used assess the condition and progress of the firm. When looking at the firm a major indicator of
performance is the profit level, ultimately a firm needs to be profitable in order to survive; this is the primary aim of the vast majority of businesses (Elliott and Elliott,
2008). Without the potential for a profit investors will not wish to invest in the firm (Howells and Bain, 2007). The profit
level may be measures using three primary measures; gross, operating and net profit margins. The first we will look at is the gross profit margin. The gross margin is
the gross profit expressed as a percentage (Elliott and Elliott, 2007). This is the level of revenue that remains when all of the direct costs for producing the goods or
services are deducted form the revenue. This indicates the level at which direct costs account take up revenue. It may also be used to assess the patterns or trends in
the firm. This is shown below. Figure 1 Gross Profit Margin 2007 2006 2005 Revenue (a) 10,301 10,568 11,395 Gross profit (b) 2,516 2,409 2,531 Gross profit margin
(b/a) 24.42% 22.80% 22.21% From this the problem in the net revenue generation may be seen, with the gradual decline, but this was to be expected as the firm is
discontinuing operations and building up operations in new areas. The gross profit margin is seen to improve in 2007, which is also expected as the recover takes place and cost
saving measures impact in the results. However, there are other costs, and a gross profit does not automatically lead to a realised profit for shareholders. The next profit margin
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