Income statements for Yarrick Company for the years ending December 31, 2013, 2012, and 2011 are shown below. Prepare a common-size income statement and analyze the profitability of the company.
Yarrick Company Income Statements for the Years Ending December 31, 2013, 2012, and 2011.
|
(in millions)
|
2013
|
2012
|
2011
|
|
Net sales
|
$237
|
$155
|
$134
|
|
Cost of goods sold
|
138
|
84
|
72
|
|
Gross profit
|
$ 99
|
$ 71
|
$ 62
|
|
Sales, general, and administrative expenses
|
42
|
31
|
39
|
|
Research and development
|
38
|
33
|
54
|
|
Operating profit
|
$ 19
|
$ 7
|
($ 31)
|
|
Income tax expense (benefit)
|
7
|
2
|
(11)
|
|
Net profit
|
$ 12
|
$ 5
|
($ 20)
|