Question
Compare Rodriguez and Verde by converting their income statements to common size. Rodriguez Verde Net sales. . . . . . . . . .
Compare
Rodriguez
and
Verde
by converting their income statements to common size.
| Rodriguez | Verde |
---|---|---|
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . | $10,400 | $16,540 |
Cost of goods sold. . . . . . . . . . . . . . . . . . | 6,354 | 11,843 |
Other expense. . . . . . . . . . . . . . . . . . . | 3,401 | 3,903 |
Net income. . . . . . . . . . . . . . . . . . . . . . . . . | $645 | $794 |
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: (Round percentages to the nearest tenth percent.)
| Rodriguez |
| Verde |
| ||
---|---|---|---|---|---|---|
| Amount | % |
| Amount | % |
|
Net sales. . . . . . . . . . . . . . . . . . . | $10,400 |
| % | $16,540 |
| % |
Cost of goods sold. . . . . . . . . . | 6,354 |
| % | 11,843 |
| % |
Other expenses. . . . . . . . . . . . . | 3,401 |
| % | 3,903 |
| % |
Net income. . . . . . . . . . . . . . . . . | $645 |
| % | $794 |
| % |
Which company earns more net income? Which company's net income is a higher percentage of its net sales?
Verde
Rodriguez
earns more net income.
Rodriguez
Verde
has a net income at a higher percentage of net sales.
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