GARRITY ELECTRONICS COMPANY
	Common-Size Income Statement
							Electronics
			Garrity				Industry
			Electronics Company				Average
			Amount		Percent
	Sales		$ 4,728,800				102.5%
	Sales returns and allowances		128,800				2.5%
	Net sales		$ 4,600,000		100.0%		100.0%
	Cost of goods sold		2,668,000				61.0%
	Gross profit		$ 1,932,000				39.0%
	Selling expenses		$ 1,472,000				23.0%
	Administrative expenses		368,000				10.0%
	Total operating expenses		$ 1,840,000				33.0%
	Operating income		$ 92,000				6.0%
	Other income		138,000				3.0%
			$ 230,000				9.0%
	Other expense		46,000				1.0%
	Income before income tax		$ 184,000				8.0%
	Income tax expense		115,000				2.5%
	Net income		$ 69,000		1.5%		5.5%

Garrity Electronics Company Electronics Industry Average Sales $4,728,800 102.5% Sales returns and allowances 128,800 2.5 Net sales $4,600,000 100.0% Cost of goods sold 2,668,000 61.0 Gross profit $1,932,000 39.0% Selling expenses $1,472,000 23.0% Administrative expenses 368,000 10.0 Total operating expenses $1,840,000 33.0% Operating income $ 92,000 6.0% Other income 138,000 3.0 $ 230,000 9.0% Other expense 46,000 1.0 Income before income tax $ 184,000 8.0% Income tax expense 115,000 2.5 Net income $ 69,000 5.5% a. Prepare a common-sized income statement comparing the results of operations for Garrity Electronics Company with the industry average. b. As far as the data permit, comment on significant relationships revealed by the comparisons.