Common Size Statements
Below is the most recent income statement for Philippe. Prepare a common size income statement based on this information. How do you interpret the standardized net income? What percentage of sales goes to cost of goods sold?
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PHILIPPE CORPORATION 2002 Income Statement ($ in millions) |
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Sales |
$4,053 |
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Cost of goods sold |
2,780 |
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Depreciation |
550 |
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Earnings before interest and taxes |
$ 723 |
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Interest paid |
502 |
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Taxable income |
$ 221 |
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Taxes (34%) |
75 |
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Net income |
$ 146 |
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Dividends |
$47 |
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Addition to retained earnings |
99 |
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