Common size Statements: Maytag Corporation

Exercise 7
Student’s Name:
Institutional Affiliation:
Exercise 7
Common size Statements: Maytag Corporation
 

1992

%

1991

%

Net sales

$3,041,223

100

$2,970,626

100

Cost of sales

2,339,406

 76.92

2,254,221

 75.88

Gross profits

701,817

 23.08

716,405

 24.12

Selling, general, & admin. expenses

528,250

 17.37

524,898

 17.67

Reorganization expenses

95,000

 3.12

0

 0

Operating income

78,567

 2.58

191,507

 6.45

Interest expense

(75,004)

 2.47

(75,159)

 2.53

Other-net

3,983

0.13 

7,069

 0.24

Income before taxes and accounting changes

7,546

 0.25

123,417

 4.15

Income taxes

(15,900)

 0.52

(44,400)

 1.49

Income before accounting changes

(8,354)

 0.27

79,017

 2.66

Effects of accounting changes for postretirement benefits

(307,000)

 0.10

0

 0

Net income (loss)

$(315,354)

 0.10

$79,017

 2.66

Common size statements are created to depict line items in the statements as a percentage of a common figure. For instance, in Maytag Corporation the income statement items are expressed as a percentage of the net sales. They make an analysis of a company over time easy and comparison with other corporations as well as performance in different years manageable. They also spot trends that other financial statements could not uncover. As depicted from the common size statements above, it is easy to see that there w...