Develop common sized income statements
Linden Corp. has a 10% market share in its industry. Below are income state- ments ($millions) for Linden and for the industry.
| Linden | Industry | |
| Sales | $6,000 | $64,000 |
| Cost of goods sold | 3,200 | 33,650 |
| Gross margin Expenses:
Sales and marketing |
$2,800
$430 |
$30,350
$3,850 |
| Engineering | 225 | 2,650 |
| Finance and administration | 650 | 4,560 |
| Total expenses | $1,305 | $11,060 |
| EBIT | $1,495 | $19,290 |
| Interest expense | 230 | 4,500 |
| EBT | $1,265 | $14,790 |
| Tax | 500 | 5,620 |
| Net income | $765 | $9,170 |
a. Develop common sized income statements for Linden and the industry as a whole.
b. What areas should management focus on to improve performance, and what kind of issues should be examined or looked for in each area?
