Arlington Company Wishes to Compare Itself to a Key Competitor

Essay

Arlington Company wishes to compare itself to a key competitor, but that company is much larger in size than Arlington. Please refer to the following income statement information:
$\begin{array}{|l|r|r|}\hline&\text { Arlington Co. } & \text { Bardo } \mathrm{Co.} \\\hline \text { Revenues } & \$ 8,000 & \$ 46,000 \\\hline \text { Cost of revenues } & 3,370 & 22,000 \\\hline \text { Gross Profit } & 4,630& 24,000 \\\hline \text { Operating expenses: } & & \\\hline \text { Sales and marketing expense } & 2,100 & 3,951 \\\hline \text { General and administrative expense } & 960 & 4,98 \\\hline \text { Research and development expense } & 330 & 4,691 \\\hline \text { Total operating expenses } & \$ 3,390 & \$ 13,601 \\\hline\\\hline \text { Income before income tax } & \$ 1,240 & \$ 10,380 \\\hline \text { Income tax expense } & 260 & 2,670 \\\hline \text { Net income/(loss) } & \$ 980 & \$ 7,710 \\\hline\end{array}$

Please prepare a common-size income statement for the two companies using the following format.
(Round all amounts to the nearest tenth of a percent.)
$$\begin{array} { | l | l | l | } \hline & \text { Arlington Co. } & \text { Bardo Co. } \\\hline \text { Revenues } & & \\\hline \text { Cost of revenues } & & \\\hline \text { Gross Profit } & & \\\hline \text { Operating expenses: } & & \\\hline \text { Sales and marketing expense } & & \\\hline \text { General and administrative expense } & & \\\hline \text { Research and development expense } & & \\\hline \text { Total operating expenses } & & \\\hline & & \\\hline \text { Income before income tax } & & \\\hline \text { Income tax expense } & & \\\hline \text { Net income(loss) } & & \\\hline\end{array}$$