Acc_492_Comparison_of_Revenues_and_Expenses_of_Apollo_for_2007_and_2006

Comparison of Revenues and Expenses of Apollo for 2007 and 2006 Tittle of account 2006 2007 Difference % change Sales 246,172,918 245,213,453 (959,466) (0.004) Sales Returns (4,497,583) (13,600,221) (9,102,638) 2.024 Warranty Expense (1,100,281) (1,158,128) (57,847) 0.053 Net Sales 240,575,054 230,455,104 (10,119,950) (0.042) less: cost of goods sold $141,569,222 $130,246,645 (11,322,576) (0.080) Gross profit $99,005,832.15 $100,208,458. 261,202,626 0.012 less: Operating expenses Freight $4,302,951.46 $4,236,263.09 (66,688) (0.015) Advertising Expense $897,140 $986,854 89,714 0.100 Auto Expenses $208,974 $214,503 5,528 0.026 Research and Development $31,212,334 $212,864 (30,999,470) (0.993) Depreciation Expense $133,000 $446,000 313,000 2.353 Warehouse Salaries $4,633,384 $4,720,716 87,332 0.019 Property Tax Expense $80,495 $84,332 3,837 0.048 Legal and Professional Expense $3,605,134 $1,902,224 (1,702,910) (0.472) Bad Debt Expense $1,622,426 $0 (1,622,426) (1.000) Insurance Expense $853,943 $36,107 (817,836) (0.958) Maintenance Expense $61,136 $49,503 (11,633) (0.190) Utilities $135,643 $137,332 1,689 0.012 Telephone Expense $76,374 $52,599 (23,775) (0.311) Postage Expense $128,033 $77,804 (50,230) (0.392) Miscellaneous Office Expense $17,023 $24,892 7,869 0.462 Payroll Tax Exp $1,550,989 $1,577,812 26,823 0.017 Pension/ProfitSharing Plan Ex 3,000,000 $3,300,000 300,000 0.100 Rent or Lease Expense $2,603,486 $1,203,574 (1,399,912) (0.538) Administrative Wages Exp $16,875,306 $16,197,225 (678,081) (0.040) Total operating expenses $71,997,772 $35,460,604 (36,537,168) (0.507) EBIT $27,008,060 $64,747,854 37,739,794 1.397 Interest Expense $875,000 $2,591,737 1,716,737 1.962 EBT before other income $26,133,060 $62,156,118 36,023,058 1.378 add: other income Income from Investments $0.00 $1,426,089.31 1,426,089 Interest Income $204,302.81 $131,881.46 (72,421) (0.354) Miscellaneous Income $0.00 $2,145,000.00 2,145,000 Other Expense ($19,172,000) $0 19,172,000 (1.000) EBT $7,165,363 $65,859,088 58,693,725 8.191 Income Tax Exp. Federal $2,365,000 $13,069,000 10,704,000 4.526 Income Tax Exp. State $429,000 $2,241,000 1,812,000 4.224 Net Earnings $4,371,363 $50,549,088 46,177,725 10.564 Cost of goods sold has been controlled by 8% which has resulted in increase in gross profit of 1%. Advertising expenses has been increased by 10% which may be due to increase in cost of advertisement. Research and development cost has been drastically reduced by substantial amount. There might more legal activity involved in 2006 as compared to 2007. The fact may be verified by out of court settlement of a case. Receivables against WALL MART amount to $20.5 million seems to be not recoverable as the customer has been declared bankrupt, not provision has been made as bad debt expenses = 0 for the year Insurance expenses shows only 36107 which is wrong as there were 3 policies for which insurance premium to be recorded as an expense but the adjustment in 2007 was made for only one policy The been actual amount which should be 923113. Lease rental is going to be end at the end of 2007. There may be link between lease rental and interest expenses, lease rental have gone down whereas the interest expense has gone up. Another reason for more interest expenses may be more debt to meet research and development expenditure in 2006. The out of court settlement was made in 2006 therefore the other expenses in 2007 is 0. The company would have made more investment in non-interest bearing securities in 2007 as compared to 2006 that is why the income from interest is less and income from other investment is more.