Income statement relations. Selected income statement information for Dell Com- puter, a manufacturer of personal computers, for three recent years appears below (amounts in millions):

a. Compute the missing amounts for each of the three years.

b. Prepare a common-size income statement for each year, in which sales is equal to 100 percent and each revenue, expense, and net income are expressed as a per- centage of sales. What factors appear to explain the change in the ratio of net in- come to sales?

Transcribed Image Text:

Sales Interest Revenue Cost of Goods Sold Marketing and Administrative Expenses Research and Development Expense Income Tax Expense Net Income Year 4 Year 5 Year 6 $5,296 ? $12,327 6 $ 33 52 4,229 6,093 ? 595 826 1,202 95 126 204 111 216 424 ? 531 944