Jill Akerley is concerned about her company's financial performance and financial position. She has obtained the financial statement of her largest competitor, Nova Inc. and notes that the company is over ten times larger than hers, so it is making the numbers difficult to compare. Below is condensed financial information from Nova Inc. and Scotia Inc.: Nova Inc. and Scotia Inc. Income Statements For the years ended August 31, 2024 NOVA SCOTIA Sales $5,000,000 $400,000 Cost of goods sold Gross profit Operating expenses Operating income 2,100,000 120,000 2,900,000 280,000 2,200,000 130,000 700,000 150,000 Interest expense 60,000 10.000 Income before taxes 640,000 140,000 Income taxes 150,000 30,000 Net income $490,000 $110,000 Required: USING MS EXCEL a. Prepare a vertical analysis for the companies calculating the relative percentages of each item in the financial statements. (Round your answers to the nearest tenth of a percent, ie 0.13578 → 13.6%) b. Comment on the common-sized income statements of the companies (prepared in part a.
Jill Akerley is concerned about her company's financial performance and financial position. She has obtained the financial statement of her largest competitor, Nova Inc. and notes that the company is over ten times larger than hers, so it is making the numbers difficult to compare. Below is condensed financial information from Nova Inc. and Scotia Inc.: Nova Inc. and Scotia Inc. Income Statements For the years ended August 31, 2024 NOVA SCOTIA Sales $5,000,000 $400,000 Cost of goods sold Gross profit Operating expenses Operating income 2,100,000 120,000 2,900,000 280,000 2,200,000 130,000 700,000 150,000 Interest expense 60,000 10.000 Income before taxes 640,000 140,000 Income taxes 150,000 30,000 Net income $490,000 $110,000 Required: USING MS EXCEL a. Prepare a vertical analysis for the companies calculating the relative percentages of each item in the financial statements. (Round your answers to the nearest tenth of a percent, ie 0.13578 → 13.6%) b. Comment on the common-sized income statements of the companies (prepared in part a.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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