If CanGo had a disappointing first quarter due to a fall-off in customer interest or exploding operating expenses, simply using a different income statement format is unlikely to help calm investor concerns. However, if changes in CanGo's capital structure led to less income than reported in previous quarters, isolating those changes might help investors understand the change.

After the morning meeting, Ethel discovered the reasons for CanGo's disappointing earnings report. Now she has to explain them to the rest of the management team and tell them why they will begin using a multiple-step income statement.

Click on the video window now to view the Resolution Video.

 
 
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