Arlington Company Has Prepared the Following Common-Size Income Statement to Compare

question 80

Multiple Choice

Arlington Company has prepared the following common-size income statement to compare its performance with industry averages: Which of the following statements can be correctly concluded from the above data?

• A)Arlington's gross profit per dollar of sales is higher than the industry average.
• B)Arlington's net income is higher than the industry average.
• C)Arlington achieves better results than the industry by earning higher revenues.
• D)Arlington achieves better profitability than the industry, primarily by controlling operating expenses more effectively.

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Definitions:

Annuity

A monetary instrument providing a regular series of payments to a person, often utilized in preparing for retirement.

Quarterly Payments

Payments made once every three months, often used in the context of loans or investment returns.

Compounded Annually

A method of interest calculation where interest is added to the principal once a year.

Accumulate

To gather or collect, often a gradual increase of items or value over time.