The purpose of this article is to analyze the Butler Lumber Company from a financial perspective. The financial information of the company provided include the financial statements (income statement and balance sheet) and financial ratios. From this analysis, the financial health of the company will be identified and recommendations made.
Between 2008 and 2010, Butler Lumber increased its sales revenue from $1,697 to $2,694; an increase of $997. The change in sales has consequently led to an increase in the cost of goods sold which has increased from $1,222 to $1,950 during the 3-year period. Ising (2014) suggests that the cost of goods sold rose probably due to the fact that an increase in the costs associated with production. Overall, there was an increase in the company’s operating profits.
The company’s operating expenses have been on a constant increase. The increase in the operating expenses is probably due to an … Read More