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    Yarrick Company - Common income statement

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    3.11. Income statements for Yarrick Company for the years ending December 31, 2007, 2006,
    and 2005 are shown below. Prepare a common-size income statement and analyze the
    profitability of the company.

    Yarrick Company Income Statements for the Years
    Ending December 31, 2007, 2006, and 2005
    In millions 2007 2006 2005
    Net sales 237 155 134
    Cost of goods sold 138 84 72
    Gross profit 99 71 62
    Sales, gen/admin exp 42 31 39
    research/development 38 33 54
    Operating profit 19 7 (31)
    Income tax expense (benefit) 7 2 (11)
    Net profit 12 5 (20)

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    Common size ratio is calculated in following manner:

    = Specific Item/Reference item

    In case of Income Statement , the Reference item is Net ...

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    Solution discusses Yarrick Company - Common income statement with analysis of profitablity

    $2.19

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