Financial Analysis
Marco Polo
Statement of Income
Revenue
Cost of Goods Sold
Gross Profit
Marketing Expenses
Distribution
Overheads
Interest Exp
Total Expenses
Net Income
The first year of trading was rough, in that the company lost money. While on the surface this poor performance, it should be noted that the cost of goods sold is somewhat inflated because the expenses of putting together each guide were not amortized. Thus, they are fully applied to this year, even though the sales of these books will be extended beyond this year. The sales were only for three months of this year, meaning that for at least the next two years there were be revenues without these costs associated with building ten guidebooks from scratch.
If we were to extrapolate what the profit/loss will look like next year, it should show that there is a revenue stream from sales, and while there will...
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