Pinnacle Entertainment Inc.: Case Study

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Balance Sheet Observation
Pinnacle Entertainment INC. (PNK)

a) What is the trend, in each company, in total revenues over the three years?

Growth has been observed in revenue. It is increased from (2012) 1,002,836 to (2014) 2,210,543 which is 120% growth as compare to base year. Revenue is very sensitive for the survival of company but since growth rate is very high, it is sign that company will grow further in future. PNK need to maintain it through the period, any negative in growth can badly affect the reputation of PNK. It should be more focused.

b) What is the trend, in each company, in gross profit over the three years?
It is observed when revenues increase then gross profit also increase. Here is the same situation current gross
…show more content…
What is the trend in profit margin over the three years?
Profit margin is increased from -3% base year to current year 2%. Which shows PNK has made applied significant polices and it is achieved through tight control but it is very low as compare to sales. It must be improved otherwise it can be in negative if any unusual expense occurs. e. Comment on any significant changes in revenues or expenses, negative and positive changes for each company.
Significant changes are observed in revenue and expense. Revenue is increased by 48% in first year and second year it is increased by 120% which is positive side of PNK whereas expense is concerned. Gross profit is maintained throughout the period is which is around almost 43% which is not so good but because there is clear growth in revenue so gross profit should be increased.

f. Comment on any significant changes in the discontinued operations, extraordinary items, or changes in accounting policy for each company. It shows that there is significant transaction has been made. In 2012, In profit and loss statement, loss of ($18,568) was recognized and later in 2013 loss of ($122,540) was recorded, where as in 2014 profit of $5,449 is made because of disposal of discontinued operations has taken

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