QUESTION 2

1. Briefly explain how common-size analysis is used to evaluate the financial health of an organization. (2 marks)

	COCA COLA COMPANY
	INCOME STATEMENT
	FOR YEAR ENDED DECEMBER 31
	(RM amounts are in million)
					2019		2018
Net Sales					35119		30900
Cost of goods sold					12693		11066
Gross margin					22426		19902
Expenses:
Selling and administrative expenses					13158		11358
Other operating expenses					819		313
Operating income					8449		8231
Interest expense					733		355
Other income (expenses; net)					6477		968
Income before taxes					14193		8864
Income tax expense					2384		2040
Net Income					11809		6824

Required:

Prepare common-size analysis of the company for Year 2019 and 2018.

(8 marks)

(Total: 10 marks)