Common-Size and Forecast Income Statements Refer to the income statements for The Gap, Inc., presented below. a. Prepare common-size income statements for fiscal years 2014 (ending January 31, 2015) and 2013 (ending February 1, 2014). Round answers to one decimal place (i.e., 0.2568 = 25.7%). The Gap, Inc. Common-Size Income Statements Fiscal year ended Jan. 31, 2015 Feb. 1, 2014 Net sales $16,435 þ% $16,148 0% Cost of goods sold & occupancy expenses 10,146 0 % 9,855 0% Gross profit 6,289 0% 6,293 0% Operating expenses 4,206 0 % 4,144 0 % Operating income 2,083 0% 2,149 0% Interest expense 75 0 % 61 0 % Interest income (5) 0 % (5) 0% Income before income taxes 2,013 0 % 2,093 0% Income taxes 751 0 % 813 0% Net earnings $1,262 0 % $1,280 0 % b. Prepare an income statement forecast for the fiscal year 2015 (ending January 30, 2016), based on the following assumptions: • Net sales total $15,000 million. • Cost of goods sold and occupancy expenses are 64% of sales. • Operating expenses total 26% of sales. • Interest income and interest expense are unchanged from the 2014 amounts. • The Gap's effective tax rate is 39%. Comparing Profitability Ratios for Competitors Selected income statement data for Abbott Laboratories, Bristol-Myers Squibb Company, Johnson & Johnson, GlaxoSmithKline plc, and Pfizer, Inc. is presented in the following table: Bristol- Johnson Glaxo Abbott Мyers & Smith ($ illions) Laboratories Squibb Johnson Kline plc Pfizer Sales revenue $39,001 $21,394 $65,280 £27,537 $67,675 Cost of sales 15,541 5,598 20,360 7,332 15,085 SG&A expense 12,757 5,160 20,969 8,826 19,468 R&D expense 4,129 3,839 7,548 4,009 9,112 Interest expense 530 145 571 799 1,681 Net income 4,728 5,260 9,672 5,458 10,051 Required a. Compute the profit margin (PM) and gross profit margin (GPM) ratios for each company. (As a British company, GlaxoSmithKline plc has a statutory tax rate of 26.5% in 2014; assume a statutory rate of 35% for all other companies.) (Round your answers to one decimal place.) Bristol- Johnson Glaxo Smith Мyers Laboratories Squibb Abbott & Johnson Kline plc Pfizer PM 0 % 0 % 0 % 0 % 0 % GPM 0 % 0 % 0 % 0 % 0% b. Compute the research and development (R&D) expense to sales ratio and the selling, general and administrative (SG&A) expense to sales ratio for each company. (Round your answers to one decimal place.) Bristol- Johnson Glaxo Abbott Myers Squibb & Smith Laboratories Johnson Kline plc Pfizer R&D ETS 0% 0 % 0% 0 % 0% SG&A ETS 0% 0 % 0 % 0% 0%