Q.

1 a)
1999 on sale net sales C.O.G.S gross margin selling and general, adminstration R&D other operating expence(income) operating income(loss) interest income interest expence gain(loss)on insurance of subsidary stock other non operating income(expense) income(loss)befor tax and minitory interest income tax(provision) benefit miniroty interest in net income income(loss)from continuoing operations loss o discontinuoed Pcoperations,net of tax and niniroty interest loss from operations of PC business loss on disposal of Pcoperations net loss from dicontinued PC operations net income(loss) 1 0.756087 0.243913 0.10753 0.124461 0.019533 -0.00761 0.032154 -0.05033 0.000816 -3.9E-05 -0.02501 0.009747 -0.00765 -0.02291 -0.00384 0 -0.00384 -0.02676 2575.1 1947 628.1 276.9 320.5 50.3 -19.6 82.8 -129.6 2.1 -0.1 -64.4 25.1 -19.7 -59 on sale 1 0.489485 0.510515 0.068921 0.067113 -0.00159 0.376069 0.017729 -0.01539 0.000157 0.002232 0.3808 -0.13042 -0.00712 0.243257 6362.4 3114.3 3248.1 438.5 427 -10.1 2392.7 112.8 -97.9 1 14.2 2422.8 -829.8 -45.3 1547.7 -43.5 0 -43.5 1504.2 2000 on sale 1 3935.9 0.971874 3825.2 0.028126 110.7 0.133159 524.1 0.124368 489.5 0.0187 73.6 -0.2481 -976.5 0.034503 135.8 -0.00424 -16.7 -0.00086 -3.4 -0.02508 -98.7 -0.24378 -959.5 0.113316 446 -0.00196 -7.7 -0.13242 -521.2 -0.00917 -0.0172 -0.02637 -0.06733 -36.1 -67.7 -103.8 -265 2001

-9.9 -0.00684 0 0 -9.9 -0.00684 -68.9 0.23642

Profitability ratios: 1- Profit margin: Year 2001= (-625/3935.9) = -15.88% Year 2000= (1504.2/6362.4) = 23.64% Year 1999= (-68/2575.1) = -2.68% The negative income in years 2001 and 2000 cased the profit margin to be negative; this is mostly because operating expenses were too large to be covered by sales and gross profit. The firm is not employing its resources efficiently. Will, this is not the case in year 2000 were the company was able to generate a good return on the sales dollar.

Debt utilization ratios: 1- Times interest earned: Year 2001= (-976.5/16.7) = -85.5% Year 2000= (2392.7/97.9)= 24.44% Year 1999= (-19.6/129.6) = -0.15% This firm was in danger because of its inability to meet its creditors claims of interest rate due to inability to generate sufficient operating income to cover that fixed obligation. This will have a negative image in the minds of external fund providers and a difficulty in borrowing at an acceptable rate.

Interpretations regarding common size income statements: 1- When comparing net sales between 1999-2000 with that of 20002001, we see decrease in net sales and absent of growth. This is partially due to increase in prices of 1999 and decrease in prices in 2001. The net effect of this is a decline of net sales of 1.26. 2- When comparing total operating cost of 1999-2000 with 20002001, we see that operating cost declined. The net effect for the three years is a decline of -0.156in operating cost. This is probably related to more efficient operating through using more efficient tools and merchandises to produce the semiconductor memory and more investments in research and development.

b)
1- Growth rate of sales:

Year 2001-2000 GR= -2426.5/6362.4 = -0.3813 Year 2000-1999 GR= 3787.3/2575.1 = 1.471 When comparing net sales price between 1999-2000 and 2000-2001, we see decrease in net sales and absent of growth. This is partially due to increase in price 1999-2000 and decrease in pricing 2000-2001. The net effect of this is a reverse growth (decline) in net sales of (1.26).

2- Total operating costs:

Year 2001 = 1087.2 2000 = 855.4 1999 = 647.4 Year 2001-2000 TOC= 1087.2-855.4/855.4 = 0.271

Year 2000-1999 TOC= 855.4-647.4/855.4 = 0.3213 When comparing total operating income between 1999-2000 and 20002001, we see decrease in operating cost. The net effect rate of this in reverse (decline) in net operating cost of (0.156). This is probably related to more efficient operating through using more efficient tools and merchandise to produce the semiconductor money and more investment in research and development.

Q. 2
[1] Cost of goods sold first appears to be decreasing in % related to sales. Between years 1999 and 2000 then increasing in % related to sales in 2001. This shown in net sale to increase in 2000 and then decrease in 2001. [2] As a result of changes in C.O.G.S % of sale. Gross margin has increased then decreased as ay of sale .Because the spread between cost of incurring and producing the semiconductor, and the price/ quantity of sales .First increased and then decreased profitability of the company increased then decreased. [3] Total operating cost selling, general and administrative, R & D , other operating as a % of sales first decreased resulting in increase in OI as a % of sales indicating more efficiency in operating. Then OC increased resulting in a loss from operating. [4] Interest income, interest exp, Gain / losses and other NOI. First decreased as a % of sale then increased resulting in an increase in EBIT then a loss in EBIT. [5] Income tax .decreased then increased as a % of sale. Minatory interest continued to increase although in negative valve. Net effect that income from continued operations increased then decreased as a % of sales. [6] Losses from discontinued operation continued to increase as % of sales. [7] Net income increased (I am generating more from what is sell) then decreased as (generating lee from what I sell) % of sales indicating. [8] for the company to be successful and continue for long-term the c Micron technology have increase its prices or reduce its manufacturing costs.

University of Bahrain College of business administration Department of economics and finance Financial Analysis FIN331

Name: Duaa Hassan Ali Al-Aradi ID:20070986 Sec.: 02