Financial Statement Analysis Report: Elf Corporation's Performance

This report provides a comprehensive analysis of Elf Corporation's financial performance based on its income statements from 2008 to 2010. The analysis begins with an overview of the purpose of an income statement and the key components that analysts examine, such as sales, expenses, and net income. The report then includes a common-size income statement, allowing for a comparative analysis of the company's financial performance over the three-year period. The report further delves into ratio analysis, calculating and interpreting key financial ratios such as profit margin, return on shareholders' equity, return on assets, asset turnover, and interest coverage ratio. By examining these ratios, the report aims to provide insights into Elf Corporation's profitability, efficiency, and financial health. The findings are then used to discuss the causes and effects of the corporation's performance during the specified period, offering conclusions on the company's overall financial standing and trends.

Financial statement Analysis

ACCOUNTING 1
Purpose of Income Statement
The main purpose of income statement is to shows the financial situation of the company
by representing the profit of the year. Income statement of the company shows the income and
expenses over a particular period of time. The main aim of the companies is to gain the profit
and the income statement is the statement which shows that company is making profit or not.
The representation of income and expenses reflects the firm’s financial situation over a specific
period of time (Woodruff, 2018).
(Source: Ford Motor Company, 2012)
An analyst has to examine the amount of sales to analyze that weather it is increases or
decreases because increasing or decreasing sales directly affects the net profit of the
organization. The other thing that an analyst has to examine is the expenses, either it is increases

ACCOUNTING 2
and decreases as it also affects the financial status of the firms. The evaluation of expenditure is
not only affects the net profit but also helps to control the expenses for smooth operations. The
third main item an analyst has to determine the financial situation is the net income for the year.
It is necessary for an analyst to examine the net profit to determine the financial performance of
the firm (Woodruff, 2018).
Income Statement of Ford Motors
Common-Size Analysis
Income Statement
2011 2012
Revenues 136264 100%
13425
2
100
%
Cost expenses 128504 94%
12796
1 95%
Income before income taxes 8681 6% 7720 6%
Net income 20222 15% 5664 4%
Net income attribute to Ford Motor
Company 20213 15% 5665 4%
(Source: Ford Motor Company, 2012)
Ratio Analysis
Ratio Analysis
AUD in Million 2012
(Net) Profit margin (a/b) Net Profit 5664
Net Sales 134252
4%
Return on shareholders’
equity Net income 5664
Shareholders’ Equity 15989

ACCOUNTING 3
35%
Return on assets Net income 5664
Total average assets 185807
3%
Asset turnover Revenue 134252
Average Assets 185807
0.72
Interest Coverage Ratio EBIT 7720
Interest Expenses 713
10.83
(Source: Ford Motor Company, 2012)

ACCOUNTING 4
References
Ford Motor Company. (2012). Ford Motor Company 2012 Annual Report. Retrieved From:
http://www.annualreports.com/HostedData/AnnualReportArchive/f/NYSE_F_2012.pdf
Woodruff, J. (2018). The Purpose of a Balance Sheet & Income Statement. Retrieved From:
https://smallbusiness.chron.com/purpose-balance-sheet-income-statement-61847.html