Determine which company is more efficient from income

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Reference no: EM132721627

Problem 1: ABC has revenues of $22 million and expenses of $15 million. XYZ has revenues of $150 million and expenses of $110 million. Can you determine which company is more efficient from these income statements?

Select an answer:

Option 1: Yes; an income statement provides all the information needed to determine how efficient one company is compared to another company.

Option 2: Yes; an income statement provides all the measures of a company's efficiency, regardless of scale.

Option 3: No; an income statement is only one measure of a company's performance, so you cannot really choose which one is more efficient.

Option 4: No; the scale of XYZ's business is so much larger than ABC's, so you will not be able to determine which company is more efficient.

Reference no: EM132721627

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