Make a vertical analysis for fine for its income statement

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Reference no: EM133168997

Question - The president of Fine 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:

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


Fine

Industry


Car Parts

Average

Net sales

$777,000

100.00%

Cost of goods sold

525,252

65.8

Gross margin

251,748

34.2

Operating expenses

163,170

19.7

Operating income

88,578

14.5

Other expenses

6,216

0.4

Net income

$82,362

14.10%

 

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


Fine

Industry


Car Parts

Average

Current assets

$303,750

70.90%

Property, plant, and equipment

117,900

23.6

Intangible assets, Net

4,950

0.8

Other assets

23,400

4.7

Total assets

$450,000

100.00%




Current liabilities

$208,800

48.10%

Long-term liabilities

103,500

16.6

Total liabilities

312,300

64.7

Shareholders' equity

137,700

35.3

Total liabilities and shareholders' equity

$450,000

100.00%

Required -

1. Make a vertical analysis for Fine 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: EM133168997

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