Prepare a common-size income statement and balance sheet

Reference no: EM13600195

Common-size statements, analysis of profitability and financial position, comparison with the industry, and using ratios to evaluate a company.
Data:
Income statement compared with industry average:

McConnell Industry Average
Net sales $778,000 100%
Cost of goods sold 522,816 65.8
Gross profit 255,184 43.2
Operating expenses 161,046 19.7
Operating income 94,138 14.5
Other expenses 4,668 0.4
Net income $89,470 14.1%

1.) Prepare a common-size income statement and balance sheet for McConnell. The first column of each statement should present McConnell's common-size statement, and the second column, the industry averages.

2.) For the profitability analysis, compute McConnell's (a) gross profit percentage and (b) rate of return on net sales. Compare these figures with the industry averages. Is McConnell's profit performance better or worse than the industry average?

3.) For the analysis of financial position, compute McConnell's (a) current ratio and (b) debt to equity ratio. Compare these ratios with the industry averages. Is McConnell's financial position better or worse than the industry averages?

Reference no: EM13600195

Questions Cloud

Hme improvement company a retail home store has two major : home improvement company a retail home store has two major divisions-outdoors and indoors. here is the data on their

On march 1 2008 eckert and kelley formed a partnership : on march 1 2008 eckert and kelley formed a partnership. eckert contributed 82500 cash and kelley contributed land

Blue mountain power company obtained authorization to issue : blue mountain power company obtained authorization to issue 20 year bonds with a face value of 10 million. the bonds

Ue the following information to answer this question : use the following information to answer this question increase in inventories 28 purchased treasury stock 17

Prepare a common-size income statement and balance sheet : common-size statements analysis of profitability and financial position comparison with the industry and using ratios

Prepare journal entries for the following assume a : prepare journal entries for the following assume a calendar-year accounting perioddec. 1 received a three-month 15

Collins and farina are forming a partnership collins is : 1. smith west and krug form a partnership. smith contributes 180000 west contributes 150000 and krug contributes

Poco reports 400000 of pretax book net income in 2011 poco : poco reports 400000 of pretax book net income in 2011. poco did not deduct any bad debt expense for book purposes but

Noe company has hundreds of owners located throughout the : noe company has hundreds of owners located throughout the country. once a month noe seds financial statements to its

User Account

All Pages