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QUESTION 2 Briefly explain how common-size analysis is used to evaluate the financial health of an organization. (2 marks) COCA COLA COMPANY INCOME STATEMENT FOR

QUESTION 2

  1. Briefly explain how common-size analysis is used to evaluate the financial health of an organization. (2 marks)

COCA COLA COMPANY

INCOME STATEMENT

FOR YEAR ENDED DECEMBER 31

(RM amounts are in million)

2019

2018

Net Sales

35119

30900

Cost of goods sold

12693

11066

Gross margin

22426

19902

Expenses:

Selling and administrative expenses

13158

11358

Other operating expenses

819

313

Operating income

8449

8231

Interest expense

733

355

Other income (expenses; net)

6477

968

Income before taxes

14193

8864

Income tax expense

2384

2040

Net Income

11809

6824

Required:

Prepare common-size analysis of the company for Year 2019 and 2018.

(8 marks)

(Total: 10 marks)

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