Consider the data for Specialty Department Stores presented in P15-29B.

Requirements
1. Prepare a common-size income statement and balance sheet for Specialty. The first column of each statement should present Specialty€™s common-size statement, and the second column, the industry averages.
2. For the profitability analysis, compute Specialty€™s
(a) Gross profit percentage and
(b) Rate of return on net sales. Compare these figures with the industry averages. Is Specialty€™s profit performance better or worse than the industry average?
3. For the analysis of financial position, compute Specialty€™s
(a) Current ratio and
(b) Debt to equity. Compare these ratios with the industry averages. Is Specialty€™s financial position better or worse than the industryaverages?

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SPECIALTY DEPARTMENT STORES, INC. Income Statement Compared with Industry Average Year Ended December 31, 2012 Industry Specialty $ 782,000 Average 100.0% Net sales Cost of goods sold Gross profit Operating expenses Operating income 528,632 65.8 $ 253,368 34.2 163,438 19.7 $ 89,930 14.5 Other expenses 4,692 0.4 14.1% $ 85,238 Net income