Using the following balance sheet, prepare and analyze the common size balance sheet:

Assets Liabilities and stockholders equity

Current assets Current liabilities

Cash 4 Accounts payable 28

Short term investments 9 Current portion of long term debt 12

Accounts receivable 32 Total current liabilities 40

Inventory 41

Prepaid expenses 2 Long term liabilities

Deferred taxes, current 7 Long term debt 48

Total current assets 95 Total liabilities 88

Long term assets Stockholders equity

Property & equipment 53 Common stock and paid in capital 51

Goodwill 12 Retained earnings 30

Long term investments 8

Other assets 1 Total stockholders equity 81

Total assets 169 Total liabilities and equity 169

Analyze the common size income statements below for 3T Company:

2015 2014

Net sales 100% 100%

COGS 89% 87%

Gross margin 11% 13%

Selling, general and administrative expenses 7% 9%

Restructuring, asset impairments and other charges 0% 9%

Income / (loss) from operations 4% (5%)

Interest expense (1%) (2%)

Income / (loss) before taxes 3% (7%)

Provision for / (benefits from) income taxes 1% 0%

Income/(loss) after taxes 2% (7%)

Discontinued operations, net 6% 1%

Net income (loss) 8% (6%)