Table 3.1 H. J. Boswell, Inc.

(1 of 2)
Income Statement ($ millions, except per share data) for the Year Ended
December 31, 2016
Sales Blank $2,700.00
Cost of goods sold Blank (2,025.00)
Gross profit Blank $ 675.00
Operating expenses: Blank Blank
Selling expense $(90.00) Blank
General and administrative expense (67.50) Blank
Depreciation and amortization expense (135.00) Blank
Total operating expenses Blank (292.50)
Net operating income (EBIT, or earnings before interest Blank $ 382.50
and taxes)
Interest expense Blank (67.50)
Earnings before taxes Blank $ 315.00

Income taxes Blank (110.25)

Net income Blank $ 204.75
 Table 4.1 H. J. Boswell, Inc.
Common-Size Income Statement for the Year Ended
December 31, 2016
Sales Blank 100.0%
Cost of goods sold Blank 75.0%
Gross profits Blank 25.0%
Operating expenses: Blank Blank
Selling expenses 3.3% Blank
General and administrative expense 2.5% Blank
Depreciation and amortization expense 5.0% Blank
Total operating expense Blank 10.8%
Net operating income (EBIT, or earnings before interest and taxes) Blank 14.2%
Interest expense Blank 2.5%
Earnings before taxes Blank 11.7%
Income taxes Blank 4.1%
Net income Blank 7.6%
Table 4.1 Observations
• Table 4.1 created by dividing each entry in the
income statement of Table 3.1 by firm sales for
2016.
Cost of goods sold make up 75% of the firm s sales
resulting in a gross profit of 25%.
Selling expenses account for about 3% of sales.
Income taxes account for 4.1% of the firm s sales.
After all expenses, the firm generates net income of
7.6% of firm s sales.