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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Common-sized income statements

The condensed income statements through income from operations for Amazon.com, Inc., Best Buy, Inc., and Wal-Mart Stores, Inc. for a recent fiscal year follow (in millions):

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  1. 1. Prepare to comparative common-sized income statements for each company. Round Percentages to one decimal place.
  2. 2. Use the common-sized analysis to compare the financial performance of the three companies.

To determine

Vertical analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

Vertical analysis percentage =(Specific itemBaseamount)×100

This analysis is otherwise called as common-size statement.

To prepare: A common-size income statement and balance sheet for R.

Given info: Income statement and balance sheet

Explanation

Vertical analysis for income statement is performed by setting the net sales ...

2)

To determine

To compare: Financial performance of the three companies.

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