Carlton, Inc., and Lofton Corporation are competitors. Compare the two companies by converting their condensed income statements to common size.

Which aompany earned more net income? Which company's net income was a higher percent-age of its net sales? Explain your answer.

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Carlton $16,000 9,536 (In millions) Net sales... Cost of goods sold Selling and administrative expenses. Lofton $7,000 4,648 1,414 14 42 154 $ 728 Other expenses... Income tax expense... Net income.... 96 32 672 S 1,216