Fixxit Ltd. has asked for your help in comparing the company's profit performance and financial position with

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Fixxit Ltd. has asked for your help in comparing the company's profit performance and financial position with the computer services industry average. The manager has given you the company's income statement and balance sheet, and also the following industry average data for computer services companies:
Fixxit Ltd. has asked for your help in comparing the

Required
1. Prepare a two-column common-size income statement and a two-column common size balance sheet for Fixxit Ltd. The first column of each statement should present Fixxit Ltd.'s common-size statement, and the second column should show the industry averages.
2. For the profitability analysis, compute Fixxit Ltd.'s (a) ratio of gross margin to net sales,
(b) Ratio of operating income to net sales, and (c) ratio of net income to net sales. Compare these figures to the industry averages. Is Fixxit Ltd.'s profit performance better or worse than the industry average?
3. For the analysis of financial position, compute Fixxit Ltd.'s
(a) Ratio of current assets to total assets, and
(b) Ratio of shareholders' equity to total assets.
Compare these ratios to the industry averages. Is Fixxit Ltd.'s financial position better or worse than the industry averages?

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Related Book For  book-img-for-question

Horngrens Accounting

ISBN: 978-0133855388

10th Canadian edition Volume 2

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood

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