Name: EMC Corp. (NYSE:EMC) | Common-Size Income Statement
Creator: Stock Analysis on Net

Common-Size Income Statement

EMC Corp., common-size consolidated income statement

12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Product sales	54.70%	57.49%	58.95%	60.15%	62.93%
Services	45.30%	42.51%	41.05%	39.85%	37.07%
Revenues	100.00%	100.00%	100.00%	100.00%	100.00%
Cost of product sales	-23.51%	-23.48%	-24.33%	-24.22%	-26.59%
Cost of services	-15.80%	-14.13%	-13.35%	-12.97%	-12.59%
Cost of revenues	-39.32%	-37.61%	-37.68%	-37.19%	-39.18%
Gross profit	60.68%	62.39%	62.32%	62.81%	60.82%
Research and development	-12.82%	-12.24%	-11.89%	-11.79%	-10.74%
Selling, general and administrative	-34.54%	-32.66%	-31.60%	-32.26%	-32.38%
Restructuring and acquisition-related charges	-1.82%	-0.98%	-0.96%	-0.51%	-0.49%
Operating income	11.50%	16.52%	17.87%	18.26%	17.21%
Investment income	0.38%	0.50%	0.55%	0.53%	0.65%
Interest expense	-0.66%	-0.60%	-0.67%	-0.36%	-0.85%
Other income (expense), net	0.45%	-1.03%	-1.11%	-0.90%	-0.76%
Non-operating income (expense)	0.17%	-1.13%	-1.23%	-0.74%	-0.97%
Income before provision for income taxes	11.67%	15.39%	16.64%	17.52%	16.24%
Income tax provision	-2.87%	-3.55%	-3.32%	-4.23%	-3.20%
Net income	8.79%	11.84%	13.32%	13.29%	13.04%
Net income attributable to the non-controlling interests	-0.74%	-0.74%	-0.88%	-0.71%	-0.74%
Net income attributable to EMC Corporation	8.06%	11.10%	12.44%	12.58%	12.30%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Between 2011 and 2015, a strategic shift in revenue composition is evident, characterized by a declining reliance on product sales and a corresponding increase in service-based revenue. Gross profit margins remained relatively stable over the five-year period, fluctuating within a narrow range around 60% to 63%, indicating consistent pricing power or cost management at the direct cost level despite the change in revenue mix.

Revenue Composition Trends: Product sales experienced a steady decline from 62.93% of total revenues in 2011 to 54.70% by 2015. In contrast, services grew from 37.07% to 45.30% over the same period, signaling a transition toward a more service-oriented business model.
Cost of Revenues and Gross Margin: The cost of product sales showed an improvement in efficiency, decreasing from 26.59% in 2011 to 23.51% in 2015. However, the cost of services rose from 12.59% to 15.80%. These offsetting movements resulted in a gross profit margin that remained resilient, peaking at 62.81% in 2012 before settling at 60.68% in 2015.
Operating Expense Analysis: Operating expenses as a percentage of revenue trended upward. Research and development investments rose from 10.74% in 2011 to 12.82% in 2015. Selling, general, and administrative expenses also increased, reaching 34.54% by 2015. Furthermore, restructuring and acquisition-related charges increased significantly toward the end of the period, rising from 0.49% in 2011 to 1.82% in 2015.
Operating and Net Profitability: Operating income exhibited a notable downward trajectory after 2012, falling from a peak of 18.26% to 11.50% in 2015. This contraction is mirrored in the net income attributable to the corporation, which declined from 12.58% in 2012 to 8.06% in 2015. The decline in bottom-line profitability is primarily attributable to the rise in operating expenses and restructuring costs rather than a failure in gross margin maintenance.

AI Ask an analyst for more

My previous chats

Add tokens

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?