3. Using the data provided in Table 1, prepare common size income statements usingrevenues and cost-of-goods-sold in the original S-1 and amended S-1. Analyze trends ofexpenses as a percentage of revenue for 2009 and 2010. Compare and contrast thefollowing ratios:a. Gross Margin Percentage;b. Asset Turnover Ratio. TABLE 1Abridged Income Statements for Groupon20092010Income Statement AccountGrossNetGrossNetRevenue$30.4 M$14.5 M$713.4 M$312.9 MCost of Sales19.5 M4.4 M433.4 M32.5 M280.0 MGross MarginMarketing ExpenseGeneral and Admin. ExpenseOther Expenses10.9 M10.1 M280.4 M4.6 M4.9 M263.2 M284.3 M7.5 M6.4 M233.9 M213.3 M203.2 M203.2 MNet Loss1.34 M1.09 M413.4 M420.1 MNet Loss to common sharcholders6.92 M6.92 M456.3 M456.3 MEPS (Basic)(0.04)(0.04)(2.66)(2.66)This information was obtained from Groupon's S-1 filing with the SEC on June 2, 2011, and the amended filing(Amendment No. 4) on October 7, 2011.

Common size income statement analyse every item of income statement as a percentage of sales. This…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

3. Using the data provided in Table 1, prepare common size income statements using

revenues and cost-of-goods-sold in the original S-1 and amended S-1. Analyze trends of

expenses as a percentage of revenue for 2009 and 2010. Compare and contrast the

following ratios:

a. Gross Margin Percentage;

b. Asset Turnover Ratio.

TABLE 1
Abridged Income Statements for Groupon
2009
2010
Income Statement Account
Gross
Net
Gross
Net
Revenue
$30.4 M
$14.5 M
$713.4 M
$312.9 M
Cost of Sales
19.5 M
4.4 M
433.4 M
32.5 M
280.0 M
Gross Margin
Marketing Expense
General and Admin. Expense
Other Expenses
10.9 M
10.1 M
280.4 M
4.6 M
4.9 M
263.2 M
284.3 M
7.5 M
6.4 M
233.9 M
213.3 M
203.2 M
203.2 M
Net Loss
1.34 M
1.09 M
413.4 M
420.1 M
Net Loss to common sharcholders
6.92 M
6.92 M
456.3 M
456.3 M
EPS (Basic)
(0.04)
(0.04)
(2.66)
(2.66)
This information was obtained from Groupon's S-1 filing with the SEC on June 2, 2011, and the amended filing
(Amendment No. 4) on October 7, 2011.

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