The Specialty 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:

Required
1. Prepare a vertical analysis for Specialty for both its income statement and balance sheet.
2. Compare the company's gross margin and profit margin ratios with the average for the industry. Comment on their investment in assets as well as their debt to assets compared to the industry information shown.

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SPECIALTY DEPARTMENT STORES INC Balance Sheet Compared with Industry Average December 31,2017 Industry SpecialtyAverage 705% Current assets $303,750 Property, plant, and 117,000 5,850 23,400 $450,000 $208,800 102,600 311,400 138,600 23.6 0.8 4.7 100.0% 48.1% 16.6 64.7 35.3 equipment Intangible assets, net Other assets Total assets Current liabilities Long-term liabilities Total liabilities Shareholders' equity Total liabilities and shareholders' equity $450,000 100.0% SPECIALTY DEPARTMENT STORES INC. Income Statement Compared with Industry Average For the Year Ended December 31, 2017 Industry SpecialtyAverage 100.0% Net sales Cost of goods sold Gross margin Operating expenses Operating income Other expenses Net income $782,000 528,632 253,368 163,438 89,930 4,692 $85.238 65.8 34.2 19.7 14.5 0.4 14.1%)