Covidien plc is an Irish company that manufactures and distributes pharmaceutical and medical device products that are similar to those sold by Johnson & Johnson. Use the excerpts of Johnson & Johnson and Covidien€™s income statements to answer the following questions:
a. Compute each line item as a percentage of sales for both companies.
b. If sales are used as a measure of size, which company is larger?
c. Which company has a higher cost of goods sold relative to sales?
d. Which company has higher selling, general, and administrative expenses relative to sales?
e. Which company has higher research and development expenses relative to sales?
f. Which company has a higher income from continuing operations relative to sales? Comment on the difference or lack of difference given other relationships observed.
g. Which company has a higher profit margin? Comment on the difference between the two companies.

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Johnson & Johnson 2013 S71312 22,342 48.970 21,830 8,183 Covidien (amounts in millions) Net Sales Cost of Goods Sold Gross Profit Selling. General, and Administrative Expenses Research and Development Expenses In-Process Research and Development Restructuring Charges, net Interest Expense Interest Income Other Expense incomel, net Income from Continuing Operations Before Income Taxes Income Tax Expense Income from Cantinuing Operations Income from Disocntinued Operations, Net of Income Taxes Net Income 2013 $10,235 4.150 6,085 3,340 508 580 482 (74) 2.498 15,471 1,640 $13.831 105 208 (16) (89) 2,029 429 S1.600 100 S1.700 S13,831