The Klein Department$$ Stores, Inc. chief executive officer$($CEO$)$ has asked you to compare the$$ company's profit performance and financial position with the averages for the industry. The CEO has given you the$$ company's income statement and balance sheet as well as the industry average data for retailers.

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Part $1$

Requirement $1.$ Prepare a$$ common$-$size income statement and balance sheet for Klein. The first column of each statement should present Klein$\text{'}$s $$common$-$size statement, and the second$$ column, the industry averages.

Begin by preparing the$$ common$-$size income statement for Klein.$($Round your answers to one decimal$$ place, X$.$X$\%.)$

Klein Department Stores, Inc.

Common$-$Size Income Statement

Year Ended December $31,2024$

Klein

Industry Average

Net Sales Revenue

$\%$

$100\mathrm{.}0$

$\%$

Cost of Goods Sold

$\%$

$65\mathrm{.}8$

$\%$

Gross Profit

$\%$

$34\mathrm{.}2$

$\%$

Operating Expenses

$\%$

$19\mathrm{.}7$

$\%$

Operating Income

$\%$

$14\mathrm{.}5$

$\%$

Other Expenses

$\%$

$0\mathrm{.}4$

$\%$

Net Income

$\%$

$14\mathrm{.}1$

$\%$

Part $2$

Prepare a$$ common$-$size balance sheet for Klein. $($Round your answers to one decimal$$ place, X$.$X$\%.)$

Klein Department Stores, Inc.

Common$-$Size Balance Sheet

December $31,2024$

Klein

Industry Average

Current Assets

$\%$

$70\mathrm{.}9\%$

Property, Plant, and Equipment, Net

$\%$

$23\mathrm{.}6\%$

Intangible Assets, Net

$\%$

$0\mathrm{.}8\%$

Other Assets

$\%$

$4\mathrm{.}7\%$

Total Assets

$\%$

$100\mathrm{.}0\%$

Current Liabilities

$\%$

$48\mathrm{.}1\%$

Long$-$term Liabilities

$\%$

$16\mathrm{.}6\%$

Total Liabilities

$\%$

$64\mathrm{.}7\%$

Stockholders' Equity

$\%$

$35\mathrm{.}3\%$

Total Liabilities and Stockholders' Equity

$\%$

$100\mathrm{.}0\%$

Part $3$

Requirement $2.$ For the profitability$$ analysis, compute Klein$\text{'}$s $($a$)$ gross profit percentage and$($b$)$ profit margin ratio. Compare these figures with the industry averages. Is Klein$\text{'}$s profit performance better or worse than the industry$$ average?

$($a$)$ Compute Klein$\text{'}$s gross profit percentage. $($Round the gross profit percentage to one decimal$$ place, X$.$X$\%.)$

Gross profit percentage

$=$

$=$

$\%$

Part $4$

$($b$)$ Compute Klein$\text{'}$s profit margin ratio. $($Round the profit margin ratio to one decimal$$ place, X$.$X$\%.)$

Profit margin ratio

$=$

$=$

$\%$

Part $5$

Compare these figures with the industry averages. Is Klein$\text{'}$s profit performance better or worse than the industry$$ average?

When comparing the gross profit percentage and the profit margin ratio with the industry$$ averages, Klein$\text{'}$s profit performance is

$$

better

worse

than the industry averages for

$$

both the gross profit percentage and the profit margin ratio

only the gross profit percentage

only the profit margin ratio

$.$

Part $6$

Requirement $3.$ For the analysis of financial$$ position, compute Klein$\text{'}$s $($a$)$ current ratio and$($b$)$ debt to equity ratio. Compare these ratios with the industry averages. Assume the current ratio industry average is$1\mathrm{.}47,$ and the debt to equity industry average is $1\mathrm{.}83.$ Is Klein$\text{'}$s financial position better or worse than the industry$$ averages?

$($a$)$ Compute Klein$\text{'}$s current ratio. $($Round the ratio to two decimal$$ places, X$.$XX$.)$

Current ratio

$=$

$=$

Part $7$

$($b$)$ Compute Klein$\text{'}$s debt to equity ratio. $($Round the ratio to two decimal$$ places, X$.$XX$.)$

Debt to equity ratio

$=$

$=$

P

Answer rating: 100% (QA)

Part 1 CommonSize Income Statement Klein Department Stores Inc CommonSize Income Statement Year Ended December 31 2024 Copy Klein Industry Average Net ... View the full answer