Make a vertical analysis for best for its income statement

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Reference no: EM133168089

Question - The president of Best Car? Parts, Inc. has asked you to compare the? company's profit performance and financial position with the averages for the industry. The accounting office has given you the? company's income statement and balance? sheet, as well as the industry average data for? competitors:

Best Car Parts, Inc. Income Statement Compared with Industry Average For the Year Ended December 31, 2020


Best

Industry


Car Parts

Average

Net sales

$779,000

100.00%

Cost of goods sold

525,046

65.8

Gross margin

253,954

34.2

Operating expenses

160,474

19.7

Operating income

93,480

14.5

Other expenses

4,674

0.4

Net income

$88,806

14.10%

 

Best Car Parts, Inc. Balance Sheet Compared with Industry Average 31-Dec-20


Best

Industry


Car Parts

Average

Current assets

$283,500

70.90%

Property, plant, and equipment

108,360

23.6

Intangible assets, Net

7,140

0.8

Other assets

21,000

4.7

Total assets

$420,000

100.00%




Current liabilities

$194,880

48.10%

Long-term liabilities

94,920

16.6

Total liabilities

289,800

64.7

Shareholders' equity

130,200

35.3

Total liabilities and shareholders' equity

$420,000

100.00%

Required -

1. Make a vertical analysis for Best for both its income statement and balance sheet.

2. Compare the? company's gross margin percentage? (gross margin as a percent of net? sales) with the average for the industry. Comment on their investment in assets compared to the industry information shown.

Reference no: EM133168089

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