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Author Question: Penny Saver Inc. and Buy 4 Less Stores are both discount retailers. As their adapted income ... (Read 53 times)

mustachegiraffe

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Penny Saver Inc. and Buy 4 Less Stores are both discount retailers. As their adapted income statements (in $ millions) for 2021 show, Penny Saver sales revenue and net income were more than three times those amounts of Buy 4 Less.

Penny SaverBuy 4 Less
Sales$4,644.9$1,302.9
Cost of goods sold  3,052.7     791.0
Gross profit1,592.2511.9
Selling, general & administrative expenses  1,226.4     498.9
Net operating income365.813.0
Other expense         6.7           .4
Income before taxes359.112.6
Income tax expense     129.6         4.1
Net income$   229.5$       8.5

Required:

a.Prepare a common-size income statement for each company. Express all percentages
using one decimal place. Your answers may not add perfectly due to rounding.
b.Which company did the better job of managing expenses? How did you reach your
conclusion?


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Marked as best answer by mustachegiraffe on Feb 5, 2023

xinyiff

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mustachegiraffe

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Reply 2 on: Feb 5, 2023
Wow, this really help


Sarahjh

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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