Check Point Analyzing an Income Statement Acc.

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Eastman Kodak (Kodak) is well known in the worldwide they are a picture and printing company. They make all different kinds of electrics such as printers, computers, and

cameras. They have been around since 1889 and is still in the business, however, they have not been doing well because it is hard to stay up with new technology. While Kodak has demonstrated a growth in sales each year since 2002, this growth is not useful as an indicator of their overall position since their operating costs grew by 15.3% from 2002 to 2003 while their sales grew only 2.9%during the same period. Their growth in sales was made primarily through acquisitions and the impact of foreign exchange rates on their holdings. Digital &Film Imaging Systems, Kodaks largest holding, experienced a 1% decrease in sales during this time. Kodaks gross profit margin has declined every year to below 30%. The overall decrease in prices for traditional film products has been the major factor in this decline. Kodaks similar margin digital products have not been adequate to offset these high-margin traditional products. One important indicator of profitability is how the figures change from 2002 to 2004. Another one is how the figures on the income statement compare to a close competitor of Kodak. Those are a couple of points an analyst will look at in assessing Kodak's profitability.