Consider the data for Russell Department Stores presented in Problem P15-35B.
Problem P15-35B
1. Prepare a common-size income statement and balance sheet for Russell. The first column of each statement should present Russell’s common-size statement, and the second column, the industry averages.
2. For the profitability analysis, compute Russell’s
(a) Gross profit percentage and
(b) Profit margin ratio.
Compare these figures with the industry averages. Is Russell’s profit performance better or worse than the industry average?
3. For the analysis of financial position, compute Russell’s
(a) Current ratio
(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 Russell’s financial position better or worse than the industry averages?

  • CreatedJune 15, 2015
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