The 2013 income statements for the Alpha Company and the Omega Company appear below: Required:
1. Prepare common size income statements for the Alpha Company and the Omega Company.
2. What is the gross margin percentage for each company?
3. What is the net income percentage for each company?
4. Briefly comment on the pricing policies of each company as well as the ability to control expenses. Disregarding the difference in size, which company appears to be doing a better job?

Question

The 2013 income statements for the Alpha Company and the Omega Company appear below:  Required:
1. Prepare common size income statements for the Alpha Company and the Omega Company.
2. What is the gross margin percentage for each company?
3. What is the net income percentage for each company?
4. Briefly comment on the pricing policies of each company as well as the ability to control expenses. Disregarding the difference in size, which company appears to be doing a better job?

Quizplus · Accepted Answer

The Answer of The 2013 income statements for the Alpha Company and the Omega Company appear below:  Required:
1. Prepare common size income statements for the Alpha Company and the Omega Company.
2. What is the gross margin percentage for each company?
3. What is the net income percentage for each company?
4. Briefly comment on the pricing policies of each company as well as the ability to control expenses. Disregarding the difference in size, which company appears to be doing a better job?

The 2013 Income Statements for the Alpha Company and the Omega