A common sized income statement is a percentage format income statement. The percentage is calculated for each line item of an income statement taking sales revenue as a base. The purpose of the common-sized income statement is to assess the percentage change in each item of the income statement. This can also be used to perform vertical analysis of each year and also for comparison between two years. For example, consider the following common sized income statement for year 2019 and 2020.
|
2019 |
Common Sized |
2020 |
Common Sized |
|
|
Sales Revenue |
500,000 |
100.00% |
580,000 |
100.00% |
|
Less: Sales return |
-10,000 |
-2.00% |
-12,500 |
-2.16% |
|
Less: Trade discount |
-32,000 |
-6.40% |
-37,000 |
-6.38% |
|
Net Sales |
458,000 |
91.60% |
530,500 |
91.47% |
|
Less: Cost of Goods sold |
-310,000 |
-62.00% |
-326,000 |
-56.21% |
|
Gross Profit |
148,000 |
29.60% |
204,500 |
35.26% |
|
Less: Operating expenses: |
|
|
|
|
|
Selling and administrative |
-35,000 |
-7.00% |
-52,000 |
-8.97% |
|
Depreciation |
-13,000 |
-2.60% |
-23,000 |
-3.97% |
|
Amortization |
-21,000 |
-4.20% |
-19,000 |
-3.28% |
|
Profit before interest and taxes |
79,000 |
15.80% |
110,500 |
19.05% |
|
Less: The interest cost |
-22,000 |
-4.40% |
-69,000 |
-11.90% |
|
Profit before tax |
57,000 |
11.40% |
41,500 |
7.16% |
|
Less: Taxes |
-18,000 |
-3.60% |
-26,000 |
-4.48% |
|
Profit after tax |
39,000 |
7.80% |
15,500 |
2.67% |
At the end of Year 1, the following information is
The following information is available for the Memphis and Billings companies:
The following information was drawn from the records of Moore Sales Company
The following information is available for Billings and Phoenix companies:
The following information was drawn from the records of Toner Sales Company
At the end of Year 1, the following information is available
Decor, Inc., manufactures bathroom fixtures. Shown for the current
