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For the profitability analysis compute mcdonough products a

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For the profitability analysis, compute McDonough Products' (a) ratio of gross profit to net sales (b) ratio of operating income to net sales, and (c) ratio of net income to net sales. Compare these figures with the industry averages. Is McDonough Products' profit performance better or worse than the average for the industry?

First column is the McDonough Products and the second is the Industry Average.

Net sales............................................................................... $        700,000             100.0%
Cost of goods sold..............................................................            490,000                 57.3
Gross profit..........................................................................            210,000                 42.7
Operating expenses ...........................................................            175,000                 29.4
Operating income................................................................              35,000                 13.3
Other expenses....................................................................                7,000                   2.5
Net income .......................................................................... $          28,000               10.8%
Current assets...................................................................... $        471,200               72.1%
Fixed assets, net .................................................................            114,700                 19.0
Intangible assets, net ..........................................................              21,080                   4.8
Other assets.........................................................................              13,020                   4.1
Total .....................................................................................            620,000 100.0%








Current liabilities .................................................................            240,560                   0.5
Long-term liabilities ............................................................            135,160                 21.0
Stockholders' equity............................................................            244,280                 31.8
Total ..................................................................................... $        620,000             100.0%








Industry Average Current Ratio
1.53









Industry Average Total Debt to Total Assets 0.68





















Reference no: EM13568660

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