A common-size income statement for Aluminum Industries 2011 operations follows. Using the firms 2012 income statement presented

A common-size income statement for Aluminum Industries’ 2011 operations follows. Using the firm’s 2012 income statement presented in Problem 2-4, develop the 2012 common-size income statement (see footnote 2) and compare it to the 2011 statement. Which areas require further analysis and investigation?

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Aluminum Industries, Inc Common-Size Income Statement For the Year Ended December 31, 2011 100.0% 65.9 34.1% Sales revenue ($35,000,000) Less: Cost of goods sold Gross profit Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense 12.7% 6.3 0.6 3.6 23.2 10.9% Total operating expense Operating profit Less: Interest expense Net profit before taxes Less: Taxes (rate = 40%) Net profits after taxes 9.4% 3.8 5.6%