Managerial Accounting 14th Edition by Ray Garrison ,Eric Noreen ,Peter Brewer 4

Exercise 1

Common-Size Income Statement
A comparative income statement is given below for Ryder Company:
The president is concerned that net income is down even though sales have increased during the year. The president is also concerned that administrative expenses have increased because the company made a concerted effort to cut waste out of the organization.
Required:
1. Express each year's income statement in common-size percentages. Carry computations to one decimal place.
2. Comment briefly on the changes between the two years.