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Common Size Income Statement: Red Lobster

Red Lobster #21212
Income Statement
For the Period of January 1-31, 2010

Red Lobster #21212
Income Statement
For the Period of January 1-31, 2010

Jan % of Sales
Sales
Food 65,302 % ?
Beverage 40,024 % ?
Total Sales 105,325 100.0%

Cost of Sales
Food 18,937 % ?
Beverage 6,004 % ?
Total Cost of Sales ? 23.7%

Gross Profit 80,384 % ?
Operating Expenses
Salaries & Wages 32,861 %
Employee Benefits 3,054 2.9%
Direct Operating Expenses 7,583 7.2%
Music and Entertainment 737 0.7%
Marketing 2,107 2.0%
Utilities 2,422 2.3%
Repairs & Maintenance 1,369 1.3%
General & Administrative Expenses 3,792 3.6%
Total Operating Expenses 53,926 % ?

Operating Profit 26,458 25.1%

Rent and Other Occupation Costs 6,109 5.8%

IBITDA 20,349 19.3%

Interest 1,053 1.0%
Income Tax 7,373 7.0%
Depreciation 1,685 1.6%

Net Income %?

Solution Preview

Hello Student,

Before I begin to assist you in answering this question, let me explain to you what a common size income statement is. Note the following:

A common size income statement is an income statement in which each account (such as cost of sales, gross profit, general expenses, net income etc.) is expressed as a percentage of the value of sales. This type of financial statement can be used to allow for easy analysis between companies or between time periods of a company. When you format financial statements in this way, it reduces the bias that can occur when analyzing companies of differing sizes. It also ...

Solution Summary

This solution provides you with an explanation of what a common size income statement is and how it is prepared. A completed common size income statement for Red Lobster for the period January 1 - 31, 2010 is also provided in the solution for illustration purposes.

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