On a Common-Size Income Statement, Operating Income Should Be Stated

question 21

Multiple Choice

On a common-size income statement, operating income should be stated as a percentage of:

• A) net income.
• B) sales revenue.
• C) operating income.
• D) total assets.

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Definitions:

Net Income

The net income of a company once all costs and taxes are deducted from its total revenue.

Short-Term Stock Investments

Investments in stocks that are intended to be held for a short period, typically less than one year, for earning quick profits.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed.

Mikel Company Bonds

Debt securities issued by Mikel Company to investors, representing loans made by investors to the company.