Top managers of Walsh 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 Walsh Products. The first column of each statement should present Walsh Products common-size statement, and the second column should show the industry averages.
2. For the profitability analysis, compute Walsh Products
(a) Ratio of gross profit to net sales
(b) Ratio of operating income to net sales,
(c) Ratio of net income to net sales.
Compare these figures with the industry averages. Is Walsh Products profit performance better or worse than the average for the industry?
3. For the analysis of financial position, compute Walsh Products
(a) Ratios of current assets and current liabilities to total assets
(b) Ratio of stockholders equity to total assets.
Compare these ratios with the industry averages. Is Walsh Products financial position better or worse than the average for theindustry?

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Walsh Products, Inc. Income Statement Compared with Industry Average Year Ended December 31, 2010 Walsh Industry Average Net sales - … Cost of goods sold648 Gross profit. Operating expenses... Operating income... 5900,000 100.0% ,000 57.3 42.7 29.4 36,000 13.3 2.5 252,000 216,000 Other expenses.13,500 Net income 22,500 10.8% Walsh Products, Inc. Balance Sheet Compared with Industry Average December 31, 2010 Walsh Industry Average $408,100 99.640 Fixed assets, net. Intangible assets, net..20,140 Other assets … Total 72.1 % 19.0 4.8 4.1 100.0% 2,120 $530,000 Current liabilities Long-term liabilities. Stockholders' equity. Total 112,360 212,000 $530,000 472% 21.0 31.8 100.0%