Question

Consider the data for McConnell Department Stores presented in Problem.


Requirements
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) profit margin ratio. 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. Assume the current ratio industry average is 1.47 and the debt to equity industry average is 1.83. Is McConnell’s financial position better or worse than the industryaverages?


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  • CreatedJanuary 16, 2015
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