Question
In: Finance
Restate the following income statements for doing a Common Size comparison: Mega Corporation
Restate the following income statements for doing a Common Size comparison:
Mega Corporation My Small Company
Sales 7,000,000 80,000
Costs 5,000,000 50,000
Gross Margin 2,000,000 30,000
Depreciation 200,000 15,000
EBIT 1,800,000 15,000
Taxes 630,000 5,000
Net Income 1,170,000 10,000
Solutions
Expert Solution
In order to do a Common Size statement comparison, we need to convert all the figures given as percentage of sales as done below
Formulas used in the excel sheet are
Now using the above details we can compare both the companies with respect to the corresponding percentage of every element. Like Costs of Mega Corporation are higher as compared to My small company on the basis of percentage sales, For Mega corporation Costs are 71.43% of Sales and that of My Small Company are 62.50% of Sales. In this way we can analyse all the various points.
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jeff jeffy answered 1 year agoRelated Solutions
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2015
2014
2013
2012
2011
Sales
100.0%
100.0%
100.0%
100.0%
100.0%
Cost of Sales
53.4%
54.6%
56.6%
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46.6%
45.4%
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42.1%
41.3%
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30.2%
29.3%
28.5%
28.3%
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2.1%
2.5%
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13.8%
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11.6%
10.8%
10.7%
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($)
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shares in Millions, $ in Millions
Feb. 01, 2020
Feb. 02, 2019
Feb. 03, 2018
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$12,554
Credit
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451
355
319
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12,019
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3,585
3,596
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$18,000
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4,000
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$18,000
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