At the end of Year 5 the following information is available for Billings and Phoenix companies:

Required

a. Prepare common size income statements for each company.

b. One company is a high-end retailer, and the other operates a discount store. Which is the discounter? Support your selection by referring to the common size statements.

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Billings Phonelx Sales Cost of goods sold Operating expenses Total assets Stockholders' equity $3,000,000 1,800,000 960,000 3,750,000 1,000,000 $3,000 2,100 780 3,750 1,200