Arlington Company has prepared the following common-size income statement to compare its performance with industry averages:
Based on the above data, an analyst could conclude that Arlington achieves better results than the industry average by controlling its operating expenses more effectively.

Question

Arlington Company has prepared the following common-size income statement to compare its performance with industry averages:
  Based on the above data, an analyst could conclude that Arlington achieves better results than the industry average by controlling its operating expenses more effectively.

Quizplus · Accepted Answer

The common-size income statement shows that Arlington's operating expenses as a percentage of sales are lower than the industry average, which indicates that they have controlled their expenses more effectively. This suggests that Arlington is performing better than the industry average in terms of controlling costs.

Arlington Company Has Prepared the Following Common-Size Income Statement to Compare