Question

Alpha Co. has cost of goods sold of $77 million, net income of $9.6 million, sales of $120 million, and total assets of $150 million. A common-size income statement will show cost of goods sold of ___ percent and a net profit of ____ percent.

Answer 1

Answer:

64.17% and 8%

Explanation:

The computation of the percentage is shown below:

For the cost of goods sold, the percentage would be

= (Cost of goods sold ÷ Sales) × 100

= ($77 million ÷ $120 million) × 100

= 64.17%

For the net income, the percentage would be

= (Net income ÷ Sales) × 100

= ($9.6 ÷ $120 million) × 100

= 8%

Simply we put the sales in denominator side and costs of goods sold or net income in numerator side