Vertical Analysis Exercise Strictly Confidential
Table of Contents
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Notes
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Vertical Analysis Exercise Year 1
Income Statement
$ millions
Revenues 39,454
Cost of sales (36,426)
Gross profit 3,028
SG&A (13)
R&D -
EBITDA 3,015
Depreciation & amortization (838)
EBIT 2,177
Interest income 114
Interest expense (241)
Other income / expenses 149
Income before taxes 2,199
Taxes (649)
Net income 1,550
Ratio Analysis
Profitability ratios Instructions: Calculate all the ratios below
Gross margin = Gross profit = 7.67%
Sales
Operating margin = EBIT = 5.52%
Sales
Net profit margin = Net income = 3.93%
Sales
Efficiency ratio
Tax ratio = Tax expense = 29.51%
Earnings before tax
Solvency ratio
Interest cover ratio = EBIT = 9.03
Interest expense
