S12-4. (Learning Objective 3: Comparing common-size Income Statements of two companies)

Hartigan, Inc., and Pintal Corporation are competitors. Compare the two companies by converting their condensed Income Statements to common size.

Which company earned more net income? Which company’s net income was a higher percentage of its net sales? Explain your answer.

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(In millions) Hartigan Pintal Net sales....... $10,850 $8,700 Cost of goods sold.. 6,499 6,029 Selling and administrative expenses. 3,125 1,688 Interest expense. 54 35 Other expenses. 33 43 Income tax expense. 432 209 Net income... $ 705 $ 696