Using the Following Information from an Annual Report,prepare a Vertical

question 109

Essay

Using the following information from an annual report,prepare a vertical analysis of the consolidated statement of earnings for the fiscal year ended June 30,20xx.(Round percentage answers to one decimal place.)
$\begin{array}{lr}&\text { (In millions) }\\\text { Net sales } & \$ 11,862 \\\text { Cost of sales } & 8,321 \\\text { Gross margin } & \$ 3,541 \\\text { Gross margin } & \$ 2,743\\ \text { Depreciation, amortization, and asset write-offs } & 278 \\\text { Total operating expenses } & \overline{\$ 3,021} \\\text { Income from operations } & 520 \\ \text { Interest expense } & \text { (91) } \\ \text { Interest and other income } & 11 \\ \text { Earnings before income taxes } & 440 \\\text { Income taxes } & 161 \\ \text { Net earnings } & 279 \\\end{array}$

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Definitions:

1934 Act

The Securities Exchange Act of 1934, which governs the trading of securities in the U.S., establishes the Securities and Exchange Commission (SEC), and mandates reporting by publicly traded companies.

Short-swing Profits Rule

A regulation intended to prevent insiders of a company from taking advantage of non-public information for quick financial gains by buying and selling their own company's stock within a six-month period.

Civil Liability

Legal responsibility for actions or omissions that cause harm or injury to another individual, subject to financial compensation rather than criminal penalties.

Dodd-Frank Act

U.S. legislation passed in 2010 aimed at promoting financial stability by improving accountability and transparency in the financial system, named after sponsors Senator Chris Dodd and Representative Barney Frank.