Common-Size Income Statements Following is the income statement for Target Corpo

Question

Common-Size Income Statements

Following is the income statement for Target Corporation. Prepare Target’s common-size income statement for the fiscal year ended January 31, 2015.
(Round your answers to one decimal place.)

($ millions) Fiscal year
ended
January 31, 2015 Sales revenue $72,618 Cost of sales 51,278 Selling, general and administrative expenses 14,676 Depreciation and amortization 2,129 Earnings from continuing operations before interest and income taxes 4,535 Net interest expense 882 Earnings from continuing operations before income taxes 3,653 Provision for income taxes 1,204 Net earnings from continuing operations 2,449 Discontinued operations, net of tax (4,085) Net earnings (loss) $(1,636)

Explanation / Answer

Every line item in the income statement is divided by the sales revenue.

TARGET CORPORATION Common-Size Income Statement Year ended: January 31, 2015 Sales revenue 100.0% Cost of sales 70.6% Selling, general and administrative expenses 20.2% Depreciation and amortization 2.9% Earnings from continuing operations before interest expense and income taxes 6.2% Net interest expense 1.2% Earnings from continuing operations before income taxes 5.0% Provision for income taxes 1.7% Net earnings from continuing operations 3.4% Discontinued operations, net of tax -5.6% Net earnings (loss) -2.3%

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