Income Statement Summary

ACCRUAL CASH



METHOD METHOD

Sales $100,000 $ 50,000

-COGS - 60,000 -60,000

Gross Margin 40,000 (10,000)

-Expenses -30,000 -30,000

Net Profit/(Loss) $ 10,000 $(40,000)

From the accounting standpoint Sandberg Corporation appears to be in good shape; from the managerial finance standpoint, it is in trouble - it had greater cash outflows than inflows

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Copyright

• 1994, HarperCollins Publishers

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