Common Sized Financial Statements
Linden Corporation has a 10% market share in its industry. Below are income statements ($millions) for Linden and for the industry.
Sales $6,000 $64,000
Cost of goods sold 3,200 33,650
Gross margin $2,800 $30,350
Sales and marketing $430 $3,850
Engineering 225 2,650
Finance and administration 650 4,560
Total expenses $1,305 $11,060
EBIT $1,495 $19,290
Interest expense 230 4,500
EBT $1,265 $14,790
Tax 500 5,620
Net income $765 $9,170
A. Develop common size income statements for Linden and the industry as a whole.
B. What areas should management focus on to improve performance, and what kind of issues should be examined or looked at in each area?
Add ratio analysis to your Excel spreadsheet for each of the pages:
The Consolidated Balance Sheets
The Consolidated Statements of Income
The Consolidated Statements of Cash Flows
One year of projected Income statement and Balance sheet (BS is optional)
(a) Ratios and then written analysis.
(b) Common Size Financial Statement for each statement already presented and written analysis.
I am needing help with the following questions. Please see attached data.
1) Using the common-sized income statements for May Department Stores Company, were the relationships between the revenues and other line items consistent? Identify any that were not and comment on what the lack of consistency might signify.
2) Using the common-sized balance sheets for May Department Stores Company, were the relationships between total assets and other line items consistent? Identify any that were not and comment on what the lack of consistency might signify.
3) Comment on the significant differences between May and the industry in which it operates.
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