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

question 197

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 does Kershner assume?
High revenues equate to a healthy income statement.
Many factors must be taken into account to calculate the income statement.
The company's revenue next year will be as good as this year's.
Operating expenses have been relatively high this year.
Gross profit is much lower than gross sales.

---

Definitions:

Tight Control

A management approach that involves close monitoring and strict enforcement of rules and procedures to ensure desired outcomes.

Proactive Leader

A leader who anticipates future challenges or opportunities and takes initiative to address them before they occur.

Environmental Change

Alterations to the natural or human-made surroundings, often referring to significant shifts in climate or ecosystems.

Takes Initiative

The action of taking charge, performing tasks, or making decisions independently without needing direct instructions or supervision.