Question

In: Accounting

true or False? Common-size income statements are prepared by diving numbers with revenue

true or False?

Common-size income statements are prepared by diving numbers with revenue

Solutions

Expert Solution

A common size income statement is an income statement in which each line item is expressed as a percentage of the value of revenue or sales. It is used for vertical analysis, in which each line item in a financial statement is represented as a percentage of a base figure within the statement.

Answer is True.


Related Solutions

Common-size financial statements. Prepare common-size income statements for Walmart and Starbucks using the January 2015 and...
Common-size financial statements. Prepare common-size income statements for Walmart and Starbucks using the January 2015 and September 2014 information in the popup window: LOADING... . Which company is doing a better job of getting sales dollars to net income? Where is the one company having an advantage over the other company in turning revenue into net income? Complete the table below: (Round to two decimal places. Net income to three decimal places.) Abbreviated Income Statements ($ in Millions) Company Walmart,...
Common-size financial statements. Prepare​ common-size income statements for Walmart and Starbucks using the January 2015 and...
Common-size financial statements. Prepare​ common-size income statements for Walmart and Starbucks using the January 2015 and September 2014 information in the popup​ window: Which company is doing a better job of getting sales dollars to net​ income? Where is the one company having an advantage over the other company in turning revenue into net​ income? Complete the table​ below: (Round to two decimal places. Net income to three decimal​ places.) Abbreviated Income Statements ($ in Millions) Company Walmart, Inc. Starbucks...
Common-size financial statements. Prepare​ common-size income statements for Walmart and Starbucks using the January 2015 and...
Common-size financial statements. Prepare​ common-size income statements for Walmart and Starbucks using the January 2015 and September 2014 information in the popup​ window:   LOADING... . Which company is doing a better job of getting sales dollars to net​ income? Where is the one company having an advantage over the other company in turning revenue into net​ income? Complete the table​ below:  ​(Round to two decimal places. Net income to three decimal​ places.) Abbreviated Income Statements ($ in Millions) Company Walmart,...
Common-Size and Pro Forma Income Statements Refer to the income statements for The Gap, Inc., presented...
Common-Size and Pro Forma Income Statements Refer to the income statements for The Gap, Inc., presented below. a. Prepare common-size income statements for fiscal years 2014 (ending January 31, 2015) and 2013 (ending February 1, 2014). Round answers to one decimal place (i.e., 0.2568 = 25.7%). The Gap, Inc. Common-Size Income Statements Fiscal year ended Jan. 31, 2015 Feb. 1, 2014 Net sales $15,779 Answer% $15,492 Answer% Cost of goods sold & occupancy expenses 9,925 Answer% 9,634 Answer% Gross profit...
Common size statements: the following are income statements for Lowe's and Home depot for the years...
Common size statements: the following are income statements for Lowe's and Home depot for the years ended February 3, 2012 and January 29, 2012, respectively: 1. The companies do not use exactly the same account titles. Align the accounts accross two companies int he manner you beleive to be the most appropriate. Then prepare common-size income statemens for Lowe's and The Home Depot. 2. Compare the two companies by using the common-size statements. The income statements for the two companies...
Determine whether or not the following statements are true or false. A. If the income consumption...
Determine whether or not the following statements are true or false. A. If the income consumption curve is vertical, the Engel curve for good y is upward sloping. B. If the price consumption curve (as the price of good x changes) is vertical, the price elasticity of demand for good x is zero. C. An upward sloping price consumption curve (as the price of good x changes) indicates that goods x and y are complements in consumption. D. If preferences...
Determine whether or not the following statements are true or false. A. If the income consumption...
Determine whether or not the following statements are true or false. A. If the income consumption curve is vertical, the Engel curve for good y is upward sloping. B. If the price consumption curve (as the price of good x changes) is vertical, the price elasticity of demand for good x is zero. C. An upward sloping price consumption curve (as the price of good x changes) indicates that goods x and y are complements in consumption. D. If preferences...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years are as follows: (amounts in thousands of dollars) 2017 2016 Sales revenue $60,000 $50,000 Cost of goods sold 42,000 30,000    Gross profit $18,000 $20,000 Selling and administrative expense 9,000 5,000    Operating income $9,000 $15,000 Interest expense 2,000 2,000    Income before tax $7,000 $13,000 Income tax expense 2,000 4,000    Net income $5,000 $9,000 Required: 1. Using the format in Example 13-5, prepare common-size comparative income...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years are as follows: (amounts in thousands of dollars) 2017 2016 Sales revenue $60,000 $50,000 Cost of goods sold 42,000 30,000    Gross profit $18,000 $20,000 Selling and administrative expense 9,000 5,000    Operating income $9,000 $15,000 Interest expense 2,000 2,000    Income before tax $7,000 $13,000 Income tax expense 2,000 4,000    Net income $5,000 $9,000 Required: 1. Using the format in Example 13-5, prepare common-size comparative income...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years are as follows: (amounts in thousands of dollars) 2017 2016 Sales revenue $60,000 $50,000 Cost of goods sold 42,000 30,000    Gross profit $18,000 $20,000 Selling and administrative expense 9,000 5,000    Operating income $9,000 $15,000 Interest expense 2,000 2,000    Income before tax $7,000 $13,000 Income tax expense 2,000 4,000    Net income $5,000 $9,000 Required: 1. Using the format in Example 13-5, prepare common-size comparative income...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT