Interpreting common-size income statements. Exhibit 3.28 presents common-size income statements for the three leading firms in the office supplies industry: Office Depot, Office Max, and Staples. Exhibit 3.28 also indicates the growth rate in combined sales for the three firms for each year and the share of combined sales realized by each of the three firms.

a. Staples has the highest net-income-to-sales percentage of the three firms. Identify the expense-to-sales percentages that give Staples this advantage, and suggest reasons for them.

b. Office Depot and Office Max have similar net-income-to-sales percentages, but the individual expense-to-sales percentages differ. Identify the expense-to-sales percentages that differ, and suggest reasons for the differences.