Question
The following are income statements of two companies that are both in the fast food industry. All amounts are in 000's and are for the
The following are income statements of two companies that are both in the fast food industry. All amounts are in 000's and are for the year ended December 31, 2021. Company A Company B (public company) (private company) Revenue $ 100,000 $ 6,000 Cost of goods sold 35,000 2,080 Gross profit 65,000 3,920 Expenses Labour expenses 15,000 905 Utilities expenses 1,950 140 Other operating expenses 33,000 1,970 Total operating expenses 49,950 3,015 Profit from operations 15,050 905 Interest expense 2,100 475 Income tax expense 4,400 21 Profit $ 8,550 $ 409 Instructions Using vertical analysis determine which corporation is the more profitable and identify the most significant cause of the difference.
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