Question

Assignment: Performance Evaluation in Organizations

Scenario

Information from Halloran Company’s Income Statement and Balance Sheets for the years 2013–2017 is presented.

Halloran company

Comparative income statements

For Years ended December31, 2017-2018

($Thousands)	2017	2016	2015	2014	2013
sales	1271	1122	1028	948	890
cost of goods solds	935	774	677	602	564
gross profits	336	348	351	347	326
operating expenses	248	192	176	128	110
net income	89	156	176	219	216

Halloran company

Comparative balance sheets statements

For Years ended December 31, 2017-2018

$thousands	2017	2016	2016	2014	2013
assets
cash	58	59	62	63	66
Accounts R	368	386	350	270	239
Merchandise inventory	1379	1023	903	774	702
Current assets	27	24	11	26	21
Long term investment	-	-	-	110	110
Plant asset,net	1515	1511	1314	708	734
Total assets	3346	3002	2639	1950	1871
Liability and equity
Current liability	915	782	539	461	410
Long term liability	971	855	834	428	435
Common stock	750	750	750	638	638
Paid in capita	202	188	188	128	128
Retaining eranings	509	428	329	297	261
Total liabilities	3346	3002	2639	1950	1871

Questions

1. Use these statements to calculate trend percentages for all components of both statements using 2013 as the base year.
2. Prepare a memo to the CEO of Halloran company summarizing your findings about the financial health of the company, using your calculations from above as evidence to support your conclusions.

Answer 1

		I=(H/A)-1	H	G=(F/A)-1	F	E=(D/A)-1	D	C=(B/A)-1	B	A
	INCOME STATEMENT
	$Thousands)		2017		2016		2015	2014		2013
		%		%		%		%
	sales	43%	1271	26%	1122	16%	1028	7%	948	890
	cost of goods sold	66%	935	37%	774	20%	677	7%	602	564
	gross profits	3%	336	7%	348	8%	351	6%	347	326
	operating expenses	125%	248	75%	192	60%	176	16%	128	110
	net income	-59%	89	-28%	156	-19%	176	1%	219	216
		I=(H/A)-1	H	G=(F/A)-1	F	E=(D/A)-1	D	C=(B/A)-1	B	A
	BALANCE SHEET
	$ thousands)	2017		2016		2015		2014		2013
		%		%		%		%
	Assets
	cash	-12%	58	-11%	59	-6%	62	-5%	63	66
	Accounts R	54%	368	62%	386	46%	350	13%	270	239
	Merchandise inventory	96%	1379	46%	1023	29%	903	10%	774	702
	Current assets	29%	27	14%	24	-48%	11	24%	26	21
	Long term investment	-100%	-	-100%	-	-100%	-	0%	110	110
	Plant asset,net	106%	1515	106%	1511	79%	1314	-4%	708	734
	Total assets	79%	3346	60%	3002	41%	2639	4%	1950	1871
	Liability and equity
	Current liability	123%	915	91%	782	31%	539	12%	461	410
	Long term liability	123%	971	97%	855	92%	834	-2%	428	435
	Common stock	18%	750	18%	750	18%	750	0%	638	638
	Paid in capita	58%	202	47%	188	47%	188	0%	128	128
	Retaining eranings	95%	509	64%	428	26%	329	14%	297	261
	Total liabilities and Equities	79%	3346	60%	3002	41%	2639	4%	1950	1871