Question

Prepare a common-size analysis of this section of Carla Vista Burgers’ income statement. Your answers may not add perfectly due to rounding. (Round answers to 1 decimal place, e.g. 50.2%.)

Could you show solutions or formulas used.

Carla Vista Burgers operates and franchises fast-food restaurants specializing in grilled hamburgers and chicken sandwiches. The 2015 and 2016 income statements are as follows (in $000s): Year Ended December 31, 2016 December 31, 2015 Total revenues $41,021 $40,513 Expenses Cost of restaurant sales 11,142 11,066 Restaurant operating expenses 16,917 16,739 General and administrative 6,820 5,300 Advertising 2,561 2,662 Depreciation and amortization 2,235 2,122 Impairment of long-lived assets 989 Total expenses 40,664 37,889 Operating income $357 $2,624

Answer 1

Formula for calculating the percentages is:

Percentage = Particular expense*100/Revenue of particular year

For example, Cost of restaurant sales = 11,142*100/41,021 = 27.2%

Please go through the following attachment for solution.

2016 100 % 2015 100 % Total Revenues Expenses Cost of restaurant sales Restaurant operating expenses General and administrative 27.2 % 11142*100/41021 41.2 % 16917* 100/41021 16.6 % 6820*100/41021 6.2 % 2561*100/41021 5.4 % 2235*100/41021 2.4 % 989*100/41021 99.1 % 40664*100/41021 0.9 % 357* 100/41021 27.3 % 11066*100/40513 41.3 % 16739*100/40513 13.1 % 5300*100/40513 6.6 % 2662*100/40513 5.2 % 2122*100/40513 0.0 % Advertising Depreciation and amortization Impairment of long-lived assets Total Expenses 93.5 % 37889*100/40513 6.5 % 2624*100/40513 Operating income