Kershner Says: "Our Income Statement Should Be Looking Good This

question 176

Short Answer

Kershner says: "Our income statement should be looking good this year. We've been doing excellent business this year, so we have a lot of gross sales. The company should be in good shape."
Michaels replies: "It remains to be seen how our income statement will look overall. In spite of strong sales revenue, the overall income statement might not be as good as we might hope."
Which of the following, if true, would strengthen Kershner's argument?
The total operating expenses were high in the current year.
The company's rent went up 30 percent from the previous year.
The cost of goods sold was low compared to gross sales.
The company is a small one compared to its competitors.
The company has a solid core of fixed assets.

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Definitions:

Atria

The upper chambers of the heart.

Inferior Vena Cava

The large vein that carries deoxygenated blood from the lower half of the body into the heart.

Right Atrium

The right upper chamber of the heart that receives deoxygenated blood from the body through the venae cavae and pumps it into the right ventricle.

Systole

The phase of the heart cycle during which the heart muscles contract and pump blood into the arteries.