QUESTION TWO You have been presented with common size income statements for two companies and the industry averages as below: POWER GROUP 2022 2021 SUPER GROUP 2022 INDUSTRY 2021 2022 Sales Cost of sales 100% 100% 100% 100% 100% 36.6% 38% 55.1% 55.3% 55.3% Gross profit 63.4% 62% 44.9% 44.7% 44.7% Other income 0% 0% 0.3% 0.1% 2.7% Selling expenses 31.3% 32.3% 16.2% 16.5% N/A Administrative and general expenses 14.1% 13.8% 21.5% 21.8% N/A EBITDA 18% 15.9% 11.5% 11.2% 4.9% Depreciation and amortization 3% 3.1% 3% 2.9% 2.1% EBIT 15% 12.8% 8.5% 8.4% 2.8% Finance income 0% 0% 0% 0% 0.1% Finance expenses 0.2% 0.5% 0.7% 0.7% 1.5% Finance costs net PBIT Income tax expense Profit After Tax 0.2% 0.5% 0.7% 0.7% 1.4% 14.8% 12.3% 6.9% 5.7% 7.6% 4.6% 3.8% 1.9% 1.6% 2.4% 10.2% 8.5% 5% 4.1% 2.6% Required a) Carry out a detailed common size analysis of the two companies over the two years focusing on the expenses and income of the companies. (10 Marks) b) Carry out a detailed comparative analysis of the two companies over the two years and the industry focusing on the expenses and income of the companies and the industry. (10 Marks)