I am to create a common-size income statement for Ford Motor Co. My textbook says that in a common-size statement, you set total sales as the denominator and all other sources of income as a percentage of that number. However, for a company like Ford, there is "financial service revenue" in addition to the automotive sales and revenue, to make up the total revenue on the income statement.
My question is, do I include the financial service revenue in the 100%, so that automotive sales and revenue would make up 85% and the financial revenue 15% of total sales? OR do I only include the automotive sales and revenue for the 100%, so that the Total Revenue is more than 100%?© BrainMass Inc. brainmass.com March 4, 2021, 5:53 pm ad1c9bdddf
Please refer to the attachment.
Usually the denominator for common-size income statement is the total revenue, i.e., the sum of automotive sales and Financial services ...
This solution discusses common-size income statements and financial revenue.