FM 2016 Week 3 - Chapter 3

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Chapter 3

Understanding

FinancialStatements,Taxes, andCash Flows

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Today Topics:1.An Overview of the Firm’s Financial Statements

2.The Income Statement

3.Corporate Taxes4.The alance Sheet

!.The Cash Flow Statement

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3.1 AN OVERVIEW OF THE FIRM’S

FINANCIAL STATEMENTS

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BASIC FINANCIAL STATEMENTSThe acco"ntin# an$ financial re#"lator% a"thorities man$atethe followin# fo"r t%pes of financial statements&

Income statement

alance sheet

Cash flow statement

Statement of sharehol$er’s e'"it%

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INCOME STATEMENT&

An income statement provi$es the followin# information for aspecific perio$ of time (for example) a f"ll %ear or '"arterl%*&

+even"e earne$

,xpenses inc"rre$

-rofit earne$

The purpose of the income statement is to show managers and

investors whether the company made or lost money during the period

being reported. One important thing to remember about an income

statement is that it represents a period of time like the cash flow

statement.

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BALANCE SHEET&

alance sheet contains information on a specific $ate (forexample) as of ecem/er 31) 2013* of the followin#&

Assets (ever%thin# of val"e the compan% owns*

ia/ilities (the firm’s $e/ts*

Sharehol$ers’ e'"it% (the mone% investe$ /% the compan%owners*

The /alance sheet is a snapshot at a sin#le point in time of thecompan%s acco"nts coverin# its assets) lia/ilities an$ sharehol$ers

e'"it%. The p"rpose of the /alance sheet is to #ive "sers an i$ea of thecompan%s financial position alon# with $ispla%in# what the compan%

owns an$ owes.

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CASH FLOW STATEMENT&It reports cash receive$ an$ cash spent /% the firmover a perio$ of time.

The primar% p"rpose of the statement of cash flows is to provi$einformation a/o"t cash receipts) cash pa%ments) an$ the net chan#ein cash res"ltin# from the operatin#) investin#) an$ financin# activities

of a compan% $"rin# the perio$

In financial acco"ntin#) a cash flow statement) also nown asstatement of cash flows) is a financial statement that shows how

chan#es in /alance sheet acco"nts an$ income affect cash an$ cashe'"ivalents) an$ /reas the anal%sis $own to operatin#) investin#

an$ financin# activities.

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STATEMENT OF SHAREHOLDER’S E!IT"&It provi$es a $etaile$ acco"nt of the firm’s activities inthe followin# acco"nts& Common stoc 5 -referre$stoc acco"nt) +etaine$ earnin#s acco"nt) an$

Chan#es to owners’ e'"it%.Statement of Stochol$er’s ,'"it% is a portion of the /alance sheet

which contains the amo"nt of capital earne$ /% the compan% inexchan#e to the stoc.

The ma6or elements of stochol$ers’ e'"it% incl"$e capital stoc) pai$incapital) retaine$ earnin#s) treas"r% stoc) "nreali7e$ loss on lon#term

investments) an$ forei#n c"rrenc% translation #ains an$ losses.

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WH" ST!D" FINANCIAL STATEMENTS# Anal%7in# a firm’s financial statement can help mana#erscarr% o"t three important tass&

Assess c"rrent performance

8onitor an$ control operations

-lan an$ forecast f"t"re performance

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3.$ THE INCOME STATEMENT

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AN INCOME STATEMENT An income statement (also calle$ a profit and loss statement *meas"res the amo"nt of profits #enerate$ /% a firm over a #iven timeperio$ ("s"all% a %ear or a '"arter*. It can /e expresse$ as follows&

+even"es (or Sales* 9 ,xpenses : -rofits

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An INCOME STATEMENT will contain the followin#&1.+even"es

2.,xpenses

9 Cost of #oo$s sol$) Sellin# expenses) ;eneral an$

a$ministrative expense) $epreciation 5 amorti7ationexpense) Interest expense) an$ Income tax expense

3.

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Ta%&' 3.1 H. (. Bos)'&&* I+c.

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E,a&-ai+/ a Fi0’s p'0 S2a0'Ea0+i+/s E4S5 a+d Di,id'+ds

Per &hare earnings ' co(pany)s net inco(edivided *y the nu(*er o+ co((on sharesoutstanding.

ividends per share ' total dividends paiddivided *y the nu(*er o+ co((on sharesoutstanding.

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E,a&-ai+/ a Fi0’s E4S a+d Di,id'+ds6o0 Bos)'&&* Ta%&' 3.15

Earnings per share ' -204.#!( %0(' -2.2$ per share

ividends per share ' -4!( %0(' -0.!0 per share

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Co++'ci+/ 2' I+co' Sa''+ a+d 2'Ba&a+c' S2''=hat can the firm $o with the net income>

-a% $ivi$en$s to sharehol$ers) an$?or +einvest in the firm

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I+'0p0'i+/ Fi0 40o6ia%i&iy -si+/2' I+co' Sa''+

From @.. oswell Inc.’s income statement (Ta/le 31* weo/serve that firm has /een profita/le.

=e can i$entif% three $ifferent meas"res of profit or income&The gross Profit margin is 2!B (DE! million*

The operating profit margin is onl% 14.2B (32.! million*

The net profit margin is onl% E.DB (204.E! million*

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I+'0p0'i+/ Fi0 40o6ia%i&iy -si+/

2' I+co' Sa''+ co+.51. The #ross profit mar#in (;-8*

: #ross profits G sales

: DE! million G 2)E00 million

: $78

;-8 in$icates the firm’s Hmar"p on its cost of #oo$ssol$ per $ollar of sales. The mar"p percenta#e e'"als

#ross profit $ivi$e$ /% cost of #oo$s sol$ (:DE!m G2.02!m : 33.3B*

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I+'0p0'i+/ Fi0 40o6ia%i&iy -si+/2' I+co' Sa''+ co+.5

2. The operatin# profit mar#in

: net operatin# income G sales

: 32.! million G 2)E00 million

: 19.18

The operatin# profit mar#in is e'"al to the ratio of netoperatin# income or ,IT $ivi$e$ /% firm’s sales.

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I+'0p0'i+/ Fi0 40o6ia%i&iy -si+/

2' I+co' Sa''+ co+.53. The net profit mar#in

: net profits G sales

: 204.E! million G 2)E00 million: .;8

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I+'0p0'i+/ Fi0 40o6ia%i&iy -si+/ 2'I+co' Sa''+ co+.5

% monitorin# an% chan#es in these mar#ins an$

comparin# these mar#ins to those of similar/"sinesses) we can $issect an$ i$entif% a firm’sperformance an$ i$entif% expenses that are o"t ofline.

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CHEC=4OINT 3.1:

CHECK YOURSELF

Co+s0-ci+/ a+ I+co' Sa''+

+econstr"ct the firm’s income statement ass"min# thefirm is a/le to c"t its cost of #oo$s sol$ /% 10B an$that the firm pa%s taxes at a 40B rate. =hat is the

firm’s net income an$ earnin#s per share>

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S'p 1: 4ic-0' 2' 40o%&'

The income statement can /e expresse$ asfollows&

+even"es 9 ,xpenses :

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S'p 1: 4ic-0' 2' 40o%&' co+.5

Revenues

Less: Cost of goods sold

Equals Grossprot

Less: Operating expenses

Equals: netOperating income

Less: Interest expense

Equals: earningsBefore taxes

Less: Income taxes

Equals:NET INCOME

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S'p $: D'cid' o+ a So&-io+ S0a'/y

;iven the acco"nt /alances) constr"ctin# the incomestatement will entail s"/stit"tin# the appropriate/alances into the template of step 1.

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S'p 3: So&,'

Revenues = !"#$"%#&&&&&

Less: Cost of goods sold= '#(")#$&&&&

Equals: prot=*#+&!#$&&&&

Less: Operating,ot-er expenses=(#'"!#&&&&&

Equals: netOperating income=+#()$&&&&

Less: Interest expense=)"#&&&&&

Equals: earningsBefore taxes=+#+%!#$&&&&

Less: Income taxes ."&/0=%!*#*&&&&Equals:NET INCOME=$1,374,900,000

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S'p 3: So&,' co+.5

,arnin#s per share&: net income G n"m/er of shares

: 1)3E4)J00)000 G E1D)2JD)2JD

: >1.?$

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S'p 9: A+a&y@'

The firm is profita/le since it earne$ net income of1)3E4)J00)000. The sharehol$ers were a/le /eearn 1.JD per share.

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3.3 COR4ORATE TAES

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Co0po0a' Ta's

A firm’s income tax lia/ilit% is /ase$ on its taxa/leincome an$ the tax rates on corporate income.

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Cop-i+/ Taa%&' I+co'

The ta/le reveals the followin#& Tax rates ran#e from 1!B to 3JB

Tax rates are pro#ressive i.e. corporations with hi#herprofits ten$ to pa% more taxes.

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Ma0/i+a& a+d A,'0a/' Ta Ra's

Ma0/i+a& a 0a' is the tax rate that the compan%will pa% on its next $ollar of taxa/le income.

A,'0a/' a 0a' is total taxes pai$ $ivi$e$ /% thetaxa/le income.

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,xample& =hat is the avera#e an$ mar#inal taxlia/ilit% for a firm reportin# 100)000 as taxa/leincome.

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Average ta/ rate ' otal ta/ lia*ility otal ta/a*le inco(e

' -22,2!0 -100,000

' 22.25%

arginal ta/ rate

' 39% as the +ir( ill have to pay 3% on itsne/t dollar o+ ta/a*le inco(e i.e. i+ its ta/a*le

inco(e increases +ro( -100,000 to -100,001.

Di,id'+d Ec&-sio+ 6o0 Co0po0a'

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Di,id'+d Ec&-sio+ 6o0 Co0po0a'S2a0'2o&d'0s

The $ivi$en$ receive$ /% corporate stockholders arepartiall% exempt from taxation. The rationale is toavoi$ $o"/le taxation at the corporate level . Thepercenta#e of exempt taxes is /ase$ on the $e#ree of

ownership of the firm.

Di,id'+d Ec&-sio+ 6o0 Co0po0a'

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Di,id'+d Ec&-sio+ 6o0 Co0po0a'S2a0'2o&d'0s

,xample =hat will /e the taxa/le income if firm Areceives 100)000 in $ivi$en$s from firm .

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3.9 THE BALANCE SHEET

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T2' Ba&a+c' S2''

The /alance sheet provi$es a snapshot of the firm’sfinancial position on a specific $ate. It is $efine$ /%the followin# e'"ation&

Total Assets :

Total ia/ilities K Total Sharehol$ers ,'"it%

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T2' Ba&a+c' S2'' co+.5

Toa& &ia%i&ii's represent the total amo"nt ofmone% the firm owes its cre$itors

Toa& s2a0'2o&d'0s’ '-iy refers to the$ifference in the val"e of the firm’s total assets an$the firm’s total lia/ilities.

Toa& ass's) s"m of total sharehol$ers’ e'"it% an$total lia/ilities) represents the reso"rces owne$ /%

the firm.

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T2' Ba&a+c' S2'' co+.5

In #eneral) ;AA- re'"ires that the firm reportassets "sin# the historical costs.

Cash an$ assets hel$ for sale (s"ch as mareta/lesec"rities* are an exception to the r"le. Theseassets are reporte$ "sin# the lower of their cost orc"rrent maret val"e.

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T2' Ba&a+c' S2'' co+.5

Assets whose val"e is expecte$ to $ecline over time(s"ch as e'"ipment* is reporte$ as Hnete'"ipment(e'"al to historical cost less theacc"m"late$ $epreciation*.

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Ta%&' 3.$ H. (. Bos)'&&* I+c.

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Fi/-0' 3.1 T2' Ba&a+c' S2''

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T2' Ba&a+c' S2'' co+.5

The /alance sheet incl"$es the followin# maincomponents&

Assets 9 It incl"$es c"rrent assets an$ fixe$ assets.

ia/ilities an$ Stochol$ers’ ,'"it% 9 It in$icateshow the firm finances its assets. It incl"$es c"rrentlia/ilities) lon#term lia/ilities) an$ owner’s e'"it%.

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T2' Ba&a+c' S2'' co+.5

C-00'+ ass's consists of firm’s cash pl"s otherassets the firm expects to convert to cash within12 months or less) s"ch as receiva/les an$inventor%.

Fi'd ass's are assets that the firm $oes notexpect to sell within one %ear. For example) plant

an$ e'"ipment) lan$.

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T2' Ba&a+c' S2'' co+.5

C-00'+ &ia%i&ii's represent the amo"nt that thefirm owes to cre$itors that m"st /e repai$ within aperio$ of 12 months or less s"ch as acco"ntspa%a/le) notes pa%a/le.

Lo+/'0 &ia%i&ii's refer to $e/t with mat"ritieslon#er than a %ear s"ch as /an loans) /on$s.

T2 B & S2 5

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T2' Ba&a+c' S2'' co+.5

The soc2o&d'0’s '-iy incl"$es the followin#&-ar val"e of common stoc K -ai$ in Capital K+etaine$ ,arnin#s.

=e can also express stochol$ers’ e'"it% asfollows&

Sharehol$ers e'"it% : Total Assets 9 Total ia/ilities

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Fi0 Li-idiy a+d N' Wo0i+/ Capia&

Li-idiy #enerall% refers to the firm’s a/ilit% tocovert its c"rrent assets into cash so that it can pa%its c"rrent lia/ilities on time. =e can th"s meas"re a

firm’s li'"i$it% /% comp"tin# its +' )o0i+/ capia& (e'"al to c"rrent assets less c"rrent lia/ilities*.

Fi0 Li-idiy a+d N' Wo0i+/

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Fi0 Li-idiy a+d N' Wo0i+/Capia& co+.5

If a firm’s net worin# capital is si#nificantl%positive) it is in a #oo$ position to pa% its $e/ts ontime an$ is conse'"entl% ver% li'"i$.

en$ers consi$er the net worin# capital as animportant in$icator of firm’s a/ilit% to repa% itsloans.

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CHEC=4OINT 3.$:CHECK YOURSELF

Co+s0-ci+/ a Ba&a+c' S2''

+econstr"ct the ;ap’s /alance sheet to reflect therepa%ment of 1 /illion in shortterm $e/t "sin# a

lie amo"nt of the firm’s cash. =hat is the/alance for total assets an$ c"rrent lia/ilities>

S 1 4i 2 4 %&

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S'p 1: 4ic-0' 2' 40o%&'

The firm’s /alance sheet can /e expresse$ asfollows&

Toa& S2a0'2o&d'0s’ E-iy

Toa& Lia%i&ii'sG Toa& Ass's

S 1 4i 2 4 %& 5

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S'p 1: 4ic-0' 2' 40o%&' co+.5

Current 1ssets

Cas-1ccounts Receiva2leInventoriesOt-er current assets

3otal current assets

Current Lia2ilities

1ccounts pa4a2le5-ort6term de2tOt-er current lia2ilities

3otal current lia2ilities

Long6term Lia2ilities

Long6term de2t

Long6term .xed0 assets

Gross 77ELess: 1ccumulated depreciation8et propert4# plant and equip9

Ot-er long6term assets

3otal long6term assets

Oner;s Equit47ar value of common stoc<7aid6in6capitalRetained earnings

3otal equit4

3otal 1ssets 3otal Lia2ilities andOners; equit4

S $ D id S & i

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S'p $: D'cid' o+ a So&-io+S0a'/y

=e are #iven the acco"nt /alances so in or$er toconstr"ct the /alance sheet we nee$ to s"/stit"tethe appropriate /alances into the template$evelope$ in step 1.

Step 3 Sol e

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Step 3: Sole

CashInventories5ther currentassets

$$!,000,000 1,"1!,000,000 $0%,000,000

Currentlia*ilities 1,12$,000,000

otal currentassets

3,30%,000,000 otal currentlia*ilities

1,12$,000,000

6et Property,Plant ande7uip(ent

2,!23,000,000 8ongter(lia*ilities

2,!3%,000,000

5ther longter(assets

!%0,000,000 Co((on E7uity 2,#!!,000,000

otal Assets !",#22,$$$,$$$

otal 8ia*ilitiesand E7uity

!",#22,$$$,$$$

S 9 A &

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S'p 9: A+a&y@'

=e can mae the followin# o/servations from ;ap’salance sheet&

9 The total assets of D)422)000)000 is finance$ /% acom/ination of c"rrent lia/ilities) lon#term lia/ilities an$

owner’s e'"it%. Owner’s e'"it% acco"nts for2)E!!)000)000 of the total.

9 The firm has a health% net worin# capital of2)11)000)000.

D'% a+d E i Fi+a+ci+/

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D'% a+d E-iy Fi+a+ci+/

The ri#hthan$ si$e of the /alance sheet reveals thefollowin# two so"rces of mone% "se$ to finance thep"rchase of the firm’s assets liste$ on the lefthan$si$e of the /alance sheet.

9 orrowin#s ($e/t financin#*

9 firms owners (e'"it% financin#*

D'% ,'0s-s E-iy

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D'% ,'0s-s E-iy

-a%ment& -a%ment for $e/t hol$ers is #enerall%fixe$ (in the form of interest*L -a%ment for e'"it%hol$ers ($ivi$en$s* is not fixe$ nor #"arantee$.

Seniorit%& e/t hol$ers are pai$ /efore e'"it%hol$ers in the event of /anr"ptc%.

8at"rit%& e/t mat"res after a fixe$ perio$ whilee'"it% sec"rities $o not mat"re.

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T2' Cas2 F&o) Sa''+

The Cas2 F&o) Sa''+ is "se$ /% firms toexplain chan#es in their cash /alances over a perio$of time /% i$entif%in# all of the so"rces an$ "ses ofcash for the perio$ spanne$ /% the statement.

So-0c's a+d !s's o6 Cas2

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So-0c's a+d !s's o6 Cas2

A so"rce of cash is an% activit% that /rin#s cashinto the firm. For example) sale of e'"ipment.

A "se of cash is an% activit% that ca"ses cash toleave the firm. For example) pa%ment of taxes.

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Ta%&' 33 H. (.Bos)'&&* I+c.* Ba&a+c'S2''s a+d Ba&a+c'S2'' C2a+/'s

Cas2 F&o) A+a&ysis co+ 5

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Cas2 F&o) A+a&ysis co+.5

=h% $i$ the cash /alance $ecline /% 4.!0m>. Seeta/le 3.1 an$ ta/le /elow&

Sorces o& Cash Uses o& Cash

Increase in AccountsPaya*le ' -4.!0 Increase in Accounts9eceiva*le -22.!0

Increase in longter( de*t'-!1.#!

Increase in inventory '-14$.!0

Increase in retainedearnings ' -1!%.#!

Increase in net plant ande7uip(ent ' -40.!0

ecrease in shortter(notes ' -%

otal &ources o+ cash '-21".00

otal :ses o+ cash '-220.!0

Cas2 F&o) A+a&ysis co+ 5

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Cas2 F&o) A+a&ysis co+.5

An anal%sis of @.. oswell’s operations reveals thefollowin#&

The firm "se$ more cash than it #enerate$)res"ltin# in a $eficit of 4.! million

The main so"rce of cash flow was retaine$ earnin#s(1!J.E!m* an$ lon#term $e/t (!1.E!m*

The lar#est "se of cash was for ac'"irin# inventor%

at 14.! million.

Cas2 F&o) A+a&ysis S-a0y

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Cas2 F&o) A+a&ysis S-a0y

Sorces o& Cash Uses o& Cash'ecrease in an asset

accont

(ncrease in an asset

accont

(ncrease in a lia)ilit*

accont

'ecrease in a lia)ilit*

accont

(ncrease in an

owner+s eit*accont

'ecrease in an

owners+ eit*accont

Cas2 F&o) Sa''+

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Cas2 F&o) Sa''+

The /asic format for a cash flow statement is asfollows&

e#innin# Cash alance

-l"s& Cash Flow from Operatin# Activities

-l"s& Cash Flow from Investin# Activities

-l"s& Cash Flow from Financin# Activities

,'"als& ,n$in# Cash alance

Cash Flow Statement -cont

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Cash Flow Statement -cont.

Operatin# activities represent the compan%’s core/"siness) incl"$in# sales an$ expenses.

Investin# activities incl"$e the cash flows thatarise o"t of the p"rchase an$ sale of lon#term

assets s"ch as plant an$ e'"ipment.

Financin# activities represent chan#es in the firm’s"se of $e/t an$ e'"it% s"ch as iss"e of new

shares) the rep"rchase of o"tstan$in# shares) an$the pa%ment of $ivi$en$s.

Ta%&' 39 H ( Bos)'&& I+c

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Ta%&' 39 H. (. Bos)'&&* I+c.

E,a&-ai+/ 2' Cas2 F&o) Sa''+

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E,a&-ai+/ 2' Cas2 F&o) Sa''+

The statement can /e "se$ to answer a n"m/er ofimportant '"estions s"ch as&@ow m"ch cash $i$ the firm #enerate from its operations>

@ow m"ch $i$ the firm invest in plant an$ e'"ipment>

i$ the firm raise a$$itional f"n$s) an$ if so) how m"ch an$from what so"rces>

Is the firm a/le to #enerate positive cash flows>

-a&iy o6 Ea0+i+/s: E,a&-ai+/

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Cas2 F&o) 60o Op'0aio+s

Since reporte$ earnin#s can sometimes /emislea$in#) we can com/ine information from thefirm’s income statement an$ the statement of cashflows to eval"ate the '"alit% of firm’s reporte$

earnin#s.

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Copyright ©2014 Pearson Education, Inc. All rights reserved. 3##

-a&iy o6 Ea0+i+/s: E,a&-ai+/Cas2 F&o) 60o Op'0aio+sco+.5

A ratio of 1.00 in$icates ver% hi#h '"alit% ofearnin#s an$ that the firm’s operatin# cash flows

an$ net income are in s%nc with each other. A low ratio in$icates firm’s reliance on non

operatin# so"rces of cash to #enerate net incomethat ma% not /e s"staina/le.

-a&iy o6 Ea0+i+/s: E,a&-ai+/

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y / /Cas2 F&o) 60o Op'0aio+sco+.5 The '"alit% of earnin#s ratio for oswell for 2013

: 1E3.2!m G 204.E!m : 4.DB

oswell’s ratio was onl% 4.DB $"e to more

cre$it sales than it collecte$) increase ininventories) noncash $epreciation expense) an$increase$ reliance on acco"nts pa%a/le.

S-sai+a%&' Capia& Ep'+di-0's:

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S-sai+a%&' Capia& Ep'+di-0's:E,a&-ai+/ I+,'s'+ Aci,ii's

This ratio calc"lates the extent to which the firm’soperatin# cash flows can pa% for capitalexpen$it"res. @i#her ratio will mean less

$epen$ence on capital marets for financin#.

S-sai+a%&' Capia& Ep'+di-0's:

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p pE,a&-ai+/ I+,'s'+ Aci,ii's co+.5

For oswell) the capital ac'"isition ratio is& : 1!E.E!m G 1!J.!m : J.JB

oswell was) on avera#e) a/le to finance J.JB ofits new expen$it"res o"t of the firm’s c"rrent%ear

operations.

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CHEC=4OINT 3.3:CHECK YOURSELF

I+'0p0'i+/ 2' Sa''+ o6 Cas2 F&o)s

;o to http&finance.#oo#le.com?finance an$ #et the cash flow

statements for the most recent fo"r%ear perio$ for ,xco+eso"rces (MCO*. @ow $oes their cash from investin#activities compare to their cash flow from operatin#

activities in 2012.

S'p 1: 4ic-0' 2' 40o%&'

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S'p 1: 4ic-0' 2' 40o%&'

he cash +lo state(ent identi+ies the netsources and uses o+ cash +or a speci+icperiod o+ ti(e into 3 groups; operatingactivities, investing activities, and +inancing

activities. C5?.

S'p $: D'cid' o+ a So&-io+

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pS0a'/y

=e can compare the cash flow from operatin#activities an$ cash flow from investin# activities /%retrievin# the cash flow statement fromhttp&??finance.#oo#le.com?finance

S'p 3: So&,'

http://finance.google.com/financehttp://finance.google.com/finance

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S'p 3: So&,'

Cash flow from operatin# activities,MCO ha$ a positive cash flow from operatin# activitiesof >719. i&&io+ in 2012. In 2011) the cash flow fromoperatin# activities was m"ch lower at 42.!4 million.

The primar% contri/"tors to the operatin# cash flowswere a$6"stments to net income.

S'p 3: So&,' co+.5

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S'p 3: So&,' co+.5

Cash flow from investin# activities&Cash flow from investin# activities were >9$;.?5i&&io+ in 2012. ,MCO ha$ investe$ heavil% in capitalexpen$it"res with a total expense of !3D.J2 million.

S'p 9: A+a&y@'

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S'p 9: A+a&y@'

The cash flow statement for 2012 $epicts aprofita/le firm with positive cash flow fromoperations that have /een stea$il% increasin#since 2010. In 2010) cash flow from operations

were onl% 33J.J2 million.

The firm has /een a##ressivel% investin# in fixe$

assets. @owever) it has $roppe$ si#nificantl%compare$ to 2011 (1)041 million*.

FM 2016 Week 3 - Chapter 3

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