Use the Common-Size Income Statement for Company A and Company B to answer this question. Company A Common Size Company B $ Common Size % $ % Revenue $132,110 100.0% 89,597 100.0% Cost of Revenue 87,257 66.0% 60.025 67.0% Gross Profit 44,853 34.0% 29,572 33.0% Selling, general and administrative 24,447 18.5% 18,529 20.7% Depreciation 2.128 1.6% 1.396 1.6% Operating profit 18,278 13.8% 9,647 10.8% Investment income 47 .036% 11 .012% Loss Debt Extinguishment 1057 1.29 Interest Expense 1.347 1.0% 859 1.0% Income from continuing operations 16,978 12.9% 7,742 8.69 Provision (benefit) for income taxes 4.112 3.1% 1.907 2.19 Net income 12,866 9.7% 5,835 6.5" Which of the following reasons explain why Company A has a higher operating profit margin?
Use the Common-Size Income Statement for Company A and Company B to answer this question. Company A Common Size Company B $ Common Size % $ % Revenue $132,110 100.0% 89,597 100.0% Cost of Revenue 87,257 66.0% 60.025 67.0% Gross Profit 44,853 34.0% 29,572 33.0% Selling, general and administrative 24,447 18.5% 18,529 20.7% Depreciation 2.128 1.6% 1.396 1.6% Operating profit 18,278 13.8% 9,647 10.8% Investment income 47 .036% 11 .012% Loss Debt Extinguishment 1057 1.29 Interest Expense 1.347 1.0% 859 1.0% Income from continuing operations 16,978 12.9% 7,742 8.69 Provision (benefit) for income taxes 4.112 3.1% 1.907 2.19 Net income 12,866 9.7% 5,835 6.5" Which of the following reasons explain why Company A has a higher operating profit margin?
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter1: The Role Of Accounting In Business
Section: Chapter Questions
Problem 1.3.5MBA: Return on assets The financial statements of The Hershey Company (HSY) are shown in Exhibits 6...
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