Final Paper

Income Statements
	2018	2017	2016
Revenue	20035225	17041091	14061837
Expenses	19314725	16448164	13612103
Operating Income	720500	592927	449734
Depreciation	100955	80705	65803
EBITDA	821455	673632	515537
Diluted EPS	10.89	8.86	7.04
Common Sized Statements
	2018	2017	2016
Revenue	100%	100%	100%
Expenses	96.4038%	96.5206%	96.8017%
Operating Income	3.5962%	3.4794%	3.1983%
Depreciation	0.5039%	0.4736%	0.4680%
EBITDA	4.1001%	3.9530%	3.6662%
Diluted EPS	0.0001%	0.0001%	0.0001%

 

A common size analysis of the company’s financial statements indicates that the expenses of the company have been reducing steadily from 2016 to 2018. This indicates that management is efficiently managing internal processes and as a result operating expenses are steadily decreasing.  The operating income of the company has also been steadily increasing, as shown by the increase in operating income earned each year as a percentage of revenue. The operating income recorded by the company increased from 3.2% in 2016 to 3.5% in 2018 (Synnex, 2019, p. 33). The increase can be attributed to the decrease in the operating expenses of the company as well as the growth in the total revenues earned by the company from 2016 to 2018.

The depreciation expense recorded by the company increased steadily from 2016 to 2018, which means that the company has been investing in new equipment and machinery. The depreciation expense as a percentage of revenue increased from 0.46% in 2016 to 0.5% in 2018. The earnings made by the company also increased from 2016 to 2018. This is shown by the increase in the EBITDA of the company from 3.7% in 2016 to 4.1% in 2018. The increase is attributed to the growth in the revenues of the company as well as the reduction of operating expenses during the three years. The EPS of the company increased significantly over the three years. The EPS increased from 7.04 in 2016 to 10.89 in 2018, which indicates increasing profitability.

References

Synnex. (2019). Annual Report. Retrieved from Synnex: https://s22.q4cdn.com/848111767/files/doc_financials/annual_reports/2018/SYNNEX-10K-eProof-1-2-14-19-AM906.pdf