Income Statement

Jessica R Pre ’Jean

Week 3 Application 2: Avnet Comprehensive Analysis Case

Introduction to Accounting

Class 1003

A description of the Avnet company’s critical accounting policies and the significant factors that influence the company's performance during the quarter ended December 31, 2011, I Analysis the Financial Condition and Results of Operations ("MD&A") it should be read in conjunction with the consolidated financial statements, including the related notes, appearing in Item 1 of this Report, as well as the Company's Annual Report on Form 10-K for the year ended July 2, 2011. In results, the second quarter of fiscal 2012 were not impacted by the movement of foreign currency exchange rates in comparison to the second quarter of fiscal 2011. For example, the U.S. Dollar is stronger than the Euro by less than 1% comparing both second quarter’s have 2012 and 2011.

Avnet finical statement refers to comparative results in both delivered dollars and constant dollars.  The delivered dollars reflect the reported results while constant dollars reflect the adjustment for fluctuations in foreign currency exchange rates between the two comparative periods. The Revenue trends quarter over quarter and year over year, Gross Margin % trends, Net Margin % trends, Gross margin % = (net sales - cost of goods sold)/net sales are all good measures of the companies manufacturing and distributing their products. The Net margin % = net profit/sales; this measures the profitability of the firms overall operations including their variable cost such as overhead, corporate, sales, and marketing. It is better to observe the trends and not just one period, to determine if they are improving their profitability and compare the metrics to their competitors to see how they compare to their overall market.

The net income and diluted earnings per share adjusted for the impact of the items discussed is useful because it provides the company's net...