Chapter 14, Problem 14.4SE

Prepare common-size income statements (Learning Objective 3)

Compare Martinez and Rojo by converting their income statements to common size.

	Martinez	Rojo
Net sales	$10,900	$19,536
Cost of goods sold	6,660	14,203
Other expense	3,564	4,356
Net income	$ 676	$ 977

Which company earns more net income? Which company’s net income is a higher percentage of its net sales?