Compare Gomez and Bajo by converting their income statements to common size.

Gomez Bajo

Net sales . . . . . . . . . . . . . . . . . . . . . . . . $10,300 $17,650

Cost of goods sold . . . . . . . . . . . . . . . . . 6,293 12,708

Other expense . . . . . . . . . . . . . . . . . . . . 3,410 4,007

Net income . . . . . . . . . . . . . . . . . . . . . . $ 597 $ 935

Which company earns more net income? Which company's net income is a higher percentage of its net sales?

Prepare the common-sized financial analysis: