Gallivan, Inc., and Tucker Ltd. are both food service distributors. As their adapted income statements (in $ millions) show, Gallivan’s sales revenue was more than double that of Tucker.

Required

a. Prepare a common-size income statement for each company. Express all percentages using one decimal place. Your answers may not add perfectly due to rounding.

b. Which company did the better job of managing expenses? How did you reach your conclusion?

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Tucker Gallivan Sales $6,630.5 $14,807.2 Cost of goods sold 4,252.2 10,109.3 Gross profit Selling, general, & administrative expenses 2,378.3 4,697.9 1,596.2 3,207.1 Net operating income Other expense 782.1 1,490.8 2.6 265.5 Income before taxes 779.5 1,225.3 Income tax expense 291.2 458.6 Net income $ 488.3 $ 766.7