Joe’s Fly-By-Night Oil’s

Please complete the following for Joe’s Fly-By-Night Oil Company, whose
latest income statement and balance sheet are shown below:

JOE'S FLY-BY-NIGHT OIL COMPANY

Income Statement, 2011 Balance Sheet, as of Dec 31, 2011

Sales $10,000 ASSETS
Cost of goods sold $4,000 Cash $5,000 
Gross profit $6,000 Accounts receivable $3,000
S, G & A expenses $3,000 Inventory $17,000 
EBIT $3,000 Current assets $25,000
Interest $200 Equipment (gross) $27,000
Before-tax earnings $2,800 Less Accum Depreciation (12,000) 
Taxes $1,000 Equipment (net) $15,000
Net income $1,800 Total assets $40,000
LIABILITIES AND EQUITY
EPS $1.80 Accounts payable $17,000
Current liabilities $17,000

Dividends $600 Long-term debt $3,000
Addition to Total liabilities $20,000 
retained earnings $1,200 Common stock (1,000 shares) $7,000
Retained earnings $13,000
Total equity $20,000
Total liabilities & Equity $40,000




• Prepare a graph of sales and net income for the years 2008 – 2011. For the
purposes of this exercise, assume the following historical sales and net income figures for Joe’s Fly-By-Night Oil:

Year Sales Net Income

2008 $8,200 $1,500
2009 $8,000 $1,400
2010 $9,000 $1,600
2011 $10,000 $1,800

Comment on the results displayed on the graph.

• Prepare a pie chart of Joe’s Fly-By-Night Oil’s expense distribution for 2011 and comment on the results displayed.

• Prepare a pie chart of Joe’s Fly-By-Night Oil’s asset distribution for Dec 31, 2011 and comment on the results displayed.

• Prepare a pie chart of Joe’s Fly-By-Night Oil’s capital structure for Dec 31, 2011
and comment on the results displayed.

Note: Be sure to comment on each of the four graphs. The numbers mean little
without your explanatory comments.