Question

​Common-size financial statements.  Prepare​ common-size income statements for Walmart and Starbucks using the January 2015 and September 2014 information in the popup​ window:   LOADING.... Which company is doing a better job of getting sales dollars to net​ income? Where is the one company having an advantage over the other company in turning revenue into net​ income? Complete the table​ below:  ​(Round to two decimal places. Net income to three decimal​ places.)

Abbreviated Income Statements ($ in Millions)
Company	Walmart, Inc.			Starbucks
Account	1/31/2015			9/30/2014
Sales	$491,826		%	$16,720		%
Cost of goods sold	$-370,456		%	$-7,244		%
Selling, general, and administrative expenses	$-94,543		%	$-11,475		%
EBIT	$26,827		%	$-1,999		%
Interest expense	$-2,347		%	$-12		%
Taxes	$-9,058		%	$744		%
Net income	$15,422		%	$-1,267		%

Answer 1

Abbreviated Income Statements ($ in Millions)
Company	Walmart, Inc.		Starbucks
Account	1/31/2015		9/30/2014
Sales	$491,826	100.00%	$16,720	100.00%
Cost of goods sold	$-370,456	-75.32%	$-7,244	-43.33%
Selling, general, and administrative expenses	$-94,543	-19.22%	$-11,475	-68.63%
EBIT	$26,827	5.45%	$-1,999	-11.96%
Interest expense	$-2,347	-0.48%	$-12	-0.07%
Taxes	$-9,058	-1.84%	$744	4.45%
Net income	$15,422	3.136%	$-1,267	-7.578%

In common-size income statement, the percentages are expresses as percentage of the total sales.

Comparison

The Walmart, Inc is doing a better job of getting sales dollars to net​ income, since it has the Net Income of 3.136% over its sales whereas the Starbucks has the net loss of -7.578% over its sales.