Q1. For Lenovo and Hewlett Packard companies listed below, complete the common-size statements by dividing each item on the income statement by sales revenue. Record the resulting common-size percentage in the shaded area provided.
Q2. The greatest amount of sales revenue was reported by (LNVGY/ DELL / _________) and the greatest net income was reported by (LNVGF / DELL / _________), which would be (_________/ unexpected).
Q3. The company that reported the highest ratio for:
a. Gross profit margin? (LNVGY / DELL / _________)
b. Operating income as a percentage of sales? (LNVGY / DELL / _________)
c. ROS? (LNVGY / DELL / _________)
d. A (_________/ lower) profitability ratio is preferred.
Q4. The company that reported the greatest percentage of expense for:
a. COGS (_________/ DELL / HPQ), which is considered (favorable / _________). Why?
b. SGA (LNVGY/ _________/ HPQ), which is considered (favorable / _________). Why?
c. R&D (LNVGY/ DELL / _________), which is considered (_________/ unfavorable). Why?
Q5. During 2010, (LNVGF / _________/ HPQ) remained the #1 direct-sale computer vendor.