Consider the data for Specialty Department Stores presented in P15-29B. Requirements 1. Prepare a common-size income statement
Question:
Requirements
1. Prepare a common-size income statement and balance sheet for Specialty. The first column of each statement should present Specialtys common-size statement, and the second column, the industry averages.
2. For the profitability analysis, compute Specialtys
(a) Gross profit percentage and
(b) Rate of return on net sales. Compare these figures with the industry averages. Is Specialtys profit performance better or worse than the industry average?
3. For the analysis of financial position, compute Specialtys
(a) Current ratio and
(b) Debt to equity. Compare these ratios with the industry averages. Is Specialtys financial position better or worse than the industryaverages?
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver