Top managers of O’Hare Products, Inc., have asked for your

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:

Top managers of O€™Hare Products, Inc., have asked for your

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?

Members

  • Access to 2 Million+ Textbook solutions
  • Ask any question from 24/7 available
    Tutors
$9.99
VIEW SOLUTION

OR

Non-Members

Get help from Managerial Accounting Tutors
Ask questions directly from Qualified Online Managerial Accounting Tutors .
Best for online homework assistance.