Analysis of Financial

Statements- Allieu Nateiials

Case - .
SubmlLLed Lo
Slr Maqbool ur 8ehman
lo8M
SubmlLLed by
Saad Ashfaq 9011
4/9/2011


App||ed Mater|a| Inc
Conso||dated Statements of Cperat|ons
Vert|ca| Ana|ys|s


Cct 27 2002 Cct 27 2003
Cct 27
2004

neL Sales

10000 10000 10000
CosL of Coods Sold

3937 6416 3381
Cross Margln

4063 3384 4619
CperaLlng Lxpense


8esearch uevelopmenL and englneerlng

2079 2036 1238

MarkeLlng and selllng

762 726 492

Ceneral and admlnlsLraLlve

639 672 446

8esLrucLurlng asseL lmpalrmenL and oLher charges

169 830 209

LlLlgaLlon seLLlemenLs neL

033
lncome/Loss from operaLlons

413 (701) 2201
lnLeresL Lxpense

097 103 066
lnLeresL lncome

333 333 148
lncome/Loss before 1axaLlon

673 (473) 2283
rovlslon for/8eneflL from 1ax

141 (139) 396
Net Income]Loss

331 (333) 1686











App||ed Mater|a| Inc
Conso||dated Statements of Cperat|ons
nor|zonta| Ana|ys|s


Cct 27 2002 Cct 27 2003 Cct 27 2004

neL Sales

10000 8844 13829
CosL of Coods Sold

10000 9338 14346
Cross Margln

10000 7801 17996
CperaLlng Lxpense


8esearch uevelopmenL and englneerlng

10000 8749 9426

MarkeLlng and selllng

10000 8431 10223

Ceneral and admlnlsLraLlve

10000 9301 11031

8esLrucLurlng asseL lmpalrmenL and oLher charges

10000 43491 19391

LlLlgaLlon seLLlemenLs neL

10000
lncome/Loss from operaLlons

10000 (14943) 84001
lnLeresL Lxpense

10000 9497 10713
lnLeresL lncome

10000 8288 6383
lncome/Loss before 1axaLlon

10000 (6213) 33721
rovlslon for/8eneflL from 1ax

10000 (8728) 66839
Net Income]Loss

10000 (SS44) S0234

Larnlng per share


8aslc

10000 3623 30000

ulluLed

10000 3623 48730










App||ed Mater|a| Inc
Conso||dated Statements of Cperat|ons
Change Ana|ys|s


Cct 27 2003 Cct 27 2004

neL Sales

(1136) 7897
CosL of Coods Sold

(442) 3009
Cross Margln

(2199) 13069
CperaLlng Lxpense


8esearch uevelopmenL and englneerlng

(1231) 774

MarkeLlng and selllng

(1369) 2128

Ceneral and admlnlsLraLlve

(699) 1881

8esLrucLurlng asseL lmpalrmenL and oLher charges

33491 (3493)

LlLlgaLlon seLLlemenLs neL

266600
lncome/Loss from operaLlons

(24943) (66207)
lnLeresL Lxpense

(303) 1280
lnLeresL lncome

(1712) (2033)
lncome/Loss before 1axaLlon

(16213) (96466)
rovlslon for/8eneflL from 1ax

(18728) (86383)
Net Income]Loss

(13344) (100602)

Larnlng per share


8aslc

(4373) 78889

ulluLed

(4373) 76667


1 IerLlcal analysls shows LhaL cosL of sales consLlLuLe ma[or porLlon of Lhe sales conslsLlng of 33 Lo
64 of sales CperaLlng expenses malnly consLlLuLes of research developmenL and englneerlng
conslsLlng of 20 ln years 2002 and year 03 and 12 ln year 2004 CLher expenses are
markeLlng and selllng and general expenses Sales ls lowesL ln year 2003 and also CosL of Sales
ls hlghesL ln year 2003 leadlng Lhe leasL gross margln of 33 durlng Lhe Lhree years 1hls has led
Lo resulL ln loss from operaLlons and ulLlmaLely neL loss afLer Lax PorlzonLal Analysls shows LhaL
sales and all cosLs decllne durlng Lhe year 2003 and Lhen lncreased durlng Lhe year 2004
Larnlng per share also decreased by almosL 30 durlng Lhe year 2003 however lncreased by
300 durlng Lhe year 2004 as compared Lo year 2002 change analysls also showed LhaL sales
cosL of sales operaLlng expense decreased as compared wlLh year 2002 Cnly resLrucLurlng
asseL lmpalrmenL and oLher charges lncreased lncome decllned by 249 and neL lncome by
133 durlng Lhe year 2003 as compared Lo 2002 ln year 2003 company suffered loss Lherefore
lL avalled Lax beneflL reduclng lLs neL loss ln year 2004 all lLems lncreased slgnlflcanLly Sales
lncreases by 78 C by 130 lncome by operaLlons by 600 and neL lncome by 1006 1he
only lLem decreased was resLrucLurlng whlch decreased by 33 LS also lncreased slgnlflcanLly
by 788
2 Slnce applled maLerlal ls a global organlzaLlon lLs flnanclal resulLs are drlven by global economy
and demands of lC's 1he global economy had suffered downLurn ln Lhe year 2001 whlch
conLlnued ln 2003 Lconomy sLarLed recovery only from Lhe 4
Lh
quarLer of 2004 1hls global
downLurn also showed ln Lhe resulLs of Allled MaLerlals Allled MaLerlals sales decllned durlng
Lhe year 2003 cosL rlsen and suffered losses Lhereon Powever lmprovemenL ln Lhe economy
lncreased Lhe sales ln year 2004 and cosL decllned ln Lhe same year ln year 2003 ln response Lo
conLlnulng buslness condlLlons company made resLrucLurlng and reallgnmenL acLlvlLles Lo
counLer lncreaslng cosLs such as reducLlon ln workforce faclllLles consolldaLlon and producL
refocuslng 1hls led Lo lncrease ln resLrucLurlng cosLs effecLlng Lhe operaLlng lncome
8esLrucLurlng compleLed ln 2004 and hence cosLs reduced resulLlng Lhe company Lo have obLaln
lncome agaln