Problem 12-14 Dollar Tree Stores, Inc., and Dollar General Corporation are both
ID: 2416180 • Letter: P
Question
Problem 12-14 Dollar Tree Stores, Inc., and Dollar General Corporation are both discount retailers. As their adapted income statements (in $ millions) show, Dollar General’s sales revenue was more than double that of Dollar Tree. Dollar Tree Dollar General Sales $6,630.5 $14,807.2 Cost of goods sold 4,252.2 10,109.3 Gross profit 2,378.3 4,697.9 Selling, general, & administrative expenses 1,596.2 3,207.1 Net operating income 782.1 1,490.8 Other expense 2.6 265.5 Income before taxes 779.5 1,225.3 Income tax expense 291.2 458.6 Net income $488.3 $766.7 Prepare a common-size income statement for each company. (Round answers to 2 decimal places, e.g. 50.12%.) Dollar Tree Dollar General Sales % % Cost of goods sold % % Gross profit % % Selling, general & administrative expenses % % Net operating income % % Other expense % % Income before taxes % % Income tax expense % % Net income % %
Explanation / Answer
The percentages are percentages of net sales (which is 100%)
Particulars amount $ % amount $ % Sales 6630.5 100 14,807.20 100 Cost of goods sold 4252.2 0.641309 10,109.30 0.682729 Gross profit 1378.3 0.207873 4697.9 0.317271 selling And admin exp 1596.2 0.240736 3207 0.216584 Net operating Income 782.1 0.117955 1490.8 0.100681 Other expanses 2.6 0.000392 265.5 0.01793 Earnings before taxes 779.5 0.117563 1225.3 0.08275 Taxes 291.2 0.043918 458.6 0.030971 Net income 488.3 0.073645 766.7 0.051779