Leslie’s Burgers operates and franchises fast-food restaurants specializing in grilled hamburgers and chicken sandwiches. The 2018 and 2019 income statements are as follows (in $000s):

Required

a. Prepare a common-size analysis of this section of Leslie’s Burgers’ income statement. Express all percentages using one decimal place. Your answers may not add perfectly due to rounding.

b. One obvious reason that operating income dropped significantly in 2019 is the impairment of long-lived assets. What other operating issues do you believe contributed to the decline in operating income?

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Year Ended December 31, 2019 December 31, 2018 Total revenues $45,130 $44,187 Expenses Cost of restaurant sales 12,644 12,489 Restaurant operating expenses 16,898 16,726 General and administrative 7,246 5,280 Advertising Depreciation and amortization Impairment of long-lived assets 2,547 2,652 2,206 2,096 986 Total expenses 42,699 39,243 Operating income $ 2,431 $ 4,944