Top managers of O€™Hare Products, Inc., have asked for your help in comparing the company€™s profit performance and financial position with the average for the industry. The accountant has given you the company€™s income statement and balance sheet and also the following data for the industry:

Requirements
1. Prepare a common-size income statement and balance sheet for O€™Hare Products. The first column of each statement should present O€™Hare Products€™ common-size statement, and the second column should show the industry averages.
2. For the profitability analysis, compare O€™Hare Products€™ (a) ratio of gross profit to net sales, (b) ratio of operating income to net sales, and (c) ratio of net income to net sales with the industry averages. Is O€™Hare Products€™ profit performance better or worse than the average for the industry?
3. For the analysis of financial position, compute O€™Hare Products€™ (a) ratios of current assets and current liabilities to total assets and (b) ratio of stockholders€™ equity to total assets. Compare these ratios with the industry averages. Is O€™Hare Products€™ financial position better or worse than the average for theindustry?

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O'Hare Products, Inc. Income Statement Compared with Industry Average Year Ended December 31, 2012 Industry O'HareAver $960,000 100.0% Net sales Cost of goods sold Gross profit Operating expenses Operating income Other expenses Net income 57.3 297,600 42.7 29.4 13.3 2.5 662,400 76,800 9,600 S 67.200 10.8% O'Hare Products, Inc. Balance Sheet Compared with Industry Average December 31, 2012 Industry Average O'Hare Current assets Fixed assets, net Intangible assets, net Other assets Total $292,000| 72.1% 72,80019.0 14,000 21,200 4.8 $400.00011 100.0% Current liabilities Long-term liabilities Stockholders' equity Total $188,000| 47.2% 84,000 128,000 $400,000 21.0 31.8 100.0%