Chapter 14, Problem 1E

Common-Size Income Statement
A comparative income statement is given below for McKenzie Sales. Ltd., of Toronto:

Members of the company's board of directors are surprised to see that net income increased by only $38,000 when sales increased by $2,000,000.
Required:

1. Express each year's income statement in common-size percentages. Carry computations to one decimal place.
2. Comment briefly on the changes between the two years.