Chartered Financial Analyst Level 1
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An analyst gathers the following information about two companies (in ¥ thousands):
Company 1 Company 2
Revenue 7,586,000 9,445,000
Cost of goods sold 3,413,700 4,533,600
Research and development expense 1,800,000 1,800,000
Advertising expense 531,020 755,600
Based on the common-size income statements, which of the following statements is most accurate?
A
Company 1 allocated a higher percentage of revenue to advertising expenses than Company 2.
B
Both companies allocated the same percentage of revenue to research and development expenses.
C
Company 1 achieved a higher gross profit margin than Company 2.