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A comparative income statement is given below for Ryder Company: Ryder Company Comparative Income Statement This Year Last Year Sales $ 7,350,000 $ 5,512,500 Cost
A comparative income statement is given below for Ryder Company: |
Ryder Company Comparative Income Statement | ||||||
This Year | Last Year | |||||
Sales | $ | 7,350,000 | $ | 5,512,500 | ||
Cost of goods sold | 4,990,800 | 3,508,000 | ||||
| | | | | | |
Gross margin | 2,359,200 | 2,004,500 | ||||
| | | | | | |
Selling and administrative expenses: | ||||||
Selling expenses | 1,480,000 | 1,078,000 | ||||
Administrative expenses | 706,500 | 608,000 | ||||
| | | | | | |
Total selling and administrative expenses | 2,186,500 | 1,686,000 | ||||
| | | | | | |
Net operating income | 172,700 | 318,500 | ||||
Interest expense | 100,000 | 92,000 | ||||
| | | | | | |
Net income before taxes | $ | 72,700 | $ | 226,500 | ||
| | | | | | |
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The president is concerned that net income is down even though sales have increased during the year. The president is also concerned that administrative expenses have increased because the company made a concerted effort to cut waste out of the organization. |
Required: | |
1. | Express each year's income statement in common-size percentages. (Input all amounts as positive values. Round your intermediate and final answer to 1 decimal places. Omit the "%" sign in your response.) |
This Year | Last Year | |||
Sales | % | % | ||
Cost of goods sold | % | % | ||
| | | | |
Gross margin | % | % | ||
| | | | |
Selling and administrative expenses: | ||||
Selling expenses | % | % | ||
Administrative expenses | % | % | ||
| | | | |
Total selling and administrative expenses | % | % | ||
| | | | |
Net operating income | % | % | ||
Interest expense | % | % | ||
| | | | |
Net income before taxes | % | % | ||
| | | | |
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