20) The Arlington Company wishes to compare its performance with industry averages. Please refer to the data below: Arlington Co. Industry Revenues $8,000 $98,000 Cost of goods sold $3,500 $38,900 Gross Profit $4,500 $59,100 Operating expenses: Sales and marketing expense $1,450 $21,000 General and administrative expense $960 $13,900 Research and development expense $330 $3,880 Total operating expenses $2,740 $38,780 Income before income tax $1,760 $20,320 Income tax expense $350 $4,100 Net income (loss) $1,410 $16,220 Please prepare common-sized income statement using the format below. (Round all amounts to the nearest tenth of a percent.) Arlington Co. Bardo Co. Revenues Cost of revenues Gross Profit Operating expenses: Sales and marketing expense General and administrative expense Research and development expense Total operating expenses Income before income tax Income tax expense Net income (loss) Learning Objective 15-4 1) The current ratio is widely used to measure a company's ability to pay current liabilities. 2) The inventory turnover ratio is a measure of the company's ability to pay all of its current liabilities if they come due immediately. 3) The inventory turnover ratio indicates how rapidly inventory is sold. 4) Days' sales in receivables is a measure of a company's ability to collect receivables. 5) Rate of return on net sales is a measure of a company's profitability.

20) The Arlington Company wishes to compare its performance with industry averages. Please refer to the data below: Arlington Co. Industry Revenues $8,000 $98,000 ...

20) The Arlington Company wishes to compare its performance with industry averages. Please refer to the data below:

	Arlington Co.	Industry
Revenues	$8,000	$98,000
Cost of goods sold	$3,500	$38,900
Gross Profit	$4,500	$59,100
Operating expenses:
Sales and marketing expense	$1,450	$21,000
General and administrative expense	$960	$13,900
Research and development expense	$330	$3,880
Total operating expenses	$2,740	$38,780

Income before income tax	$1,760	$20,320
Income tax expense	$350	$4,100
Net income (loss)	$1,410	$16,220

Please prepare common-sized income statement using the format below. (Round all amounts to the nearest tenth of a percent.)

	Arlington Co.	Bardo Co.
Revenues
Cost of revenues
Gross Profit
Operating expenses:
Sales and marketing expense
General and administrative expense
Research and development expense
Total operating expenses

Income before income tax
Income tax expense
Net income (loss)

Learning Objective 15-4

1) The current ratio is widely used to measure a company's ability to pay current liabilities.

2) The inventory turnover ratio is a measure of the company's ability to pay all of its current liabilities if they come due immediately.

3) The inventory turnover ratio indicates how rapidly inventory is sold.

4) Days' sales in receivables is a measure of a company's ability to collect receivables.

5) Rate of return on net sales is a measure of a company's profitability.

May 15, 2022