*Exercise 12-5 Carla Vista Burgers operates and franchises fast-food restaurants

Question

*Exercise 12-5 Carla Vista Burgers operates and franchises fast-food restaurants specializing in grilled hamburgers and chicken sandwiches. The 2015 and 2016 income statements are as follows (in $000s): Year Ended December 31, 2016 December 31, 2015 Total revenues $41,291 $40,413 Expenses Cost of restaurant sales Restaurant operating expenses General and administrative Advertising Depreciation and amortization Impairment of long-lived assets 11,127 16,905 6,837 2,549 2,233 994 40,645 $646 11,066 16,736 5,287 2,669 2,111 0 37,869 $2,544 Total expenses Operating income Prepare a common-size analysis of this section of Carla Vista Burgers' income statement. Your answers may not add perfectly due to rounding. (Round answers to 1 decimal place, e.g. 50.2%.) 2016 2015 Total Revenues Expenses Cost of restaurant sales Restaurant operating expenses General and administrative Advertising Depreciation and amortization Impairment of long-lived assets Total expenses Operating income

Explanation / Answer

Common Size Financial Statement: 2016 2015 Total revenues 100.00% 100.00% Expense Cost of restaurant sales 26.95% 27.38% Restaurant Operating expense 40.94% 41.41% General and admin 16.56% 13.08% Advertising 6.17% 6.60% Depreciation and amortization 5.41% 5.22% Impairment of long lived assets 2.41% 0.00% Total expense 98.44% 93.70% Operating income 1.56% 6.30%

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