Compute the common-size income statements for the 2017-2020 periods
In the note 17 to financial statements “Realignment costs”, the following information is
provided (annual report 2019):
“In January 2017, our Company initiated a major organizational realignment (The Realignment)
intended to put more responsibility, accountability and resources in the hands of local business
units of the Company’s o as to fully leverage the local capabilities our system. (…) The
realignment expenses included costs associated with involuntary terminations, voluntary
retirements and other direct costs associated with implementing the Realignment. Other direct
costs included repatriating and relocating employees to local markets; asset write- downs; lease
cancellation costs; and costs associated with the development, communication and
administration of the Realignment. We recorded total Realignment charges in 2017 of $850
million, which was included in the caption Other Operating Charges”.
In the note 17 “Streamlining Costs” (Annual report 2020), the following information is
provided:
“During 2020, the Company took steps to streamline and simplify its operations, primarily in
North America and Germany. (…) As disclosed in Note 1, under SFAS No. 146, a liability is
accrued only when certain criteria are met. All of the Company’s streamlining initiatives met
these criteria as of December 31, 2020, and all related costs have been incurred as of
December 31, 2020.
Employees separated from the Company as a result of these streamlining initiatives were
offered severance or early retirement packages, as appropriate, which included both financial
and nonfinancial components. (…) During 2020, the Company incurred total pretax expenses
related to these streamlining initiatives of approximately $561 million, or $0.15 per share after
tax. These expenses were recorded in the line item other operating charges”.
Required:
Compute the common-size income statements for the 2017-2020 periods
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