Top managers of Russian Steel Fabricators Inc., a specialty steel fabricating company, have asked for your help

Question:

Top managers of Russian Steel Fabricators Inc., a specialty steel fabricating company, have asked for your help in comparing the company's profit performance and financial position with the average for the steel fabricating industry. The accountant has given you the company's income statement and balance sheet, and also the average data for the steel fabricating industry (amounts in millions).

Required
1. Prepare a two-column common-size income statement and a two-column commonsize balance sheet for Russian Steel Fabricators Inc. The first column of each statement should present Russian Steel Fabricators Inc.'s common-size statement, and the second column should show the industry averages.
2. For the profitability analysis, compare Russian Steel Fabricators Inc.'s (a) ratio of gross margin to net sales, (b) ratio of operating income (loss) to net sales, and (c) ratio of net income (loss) to net sales. Compare these figures with the industry averages. Is Russian Steel Fabricators Inc.'s profit performance better or worse than the average for the industry?
3. For the analysis of financial position, compare Russian Steel Fabricators Inc.'s (a) ratio of current assets to total assets and (b) ratio of shareholders' equity to total assets. Compare these ratios with the industry averages. Is Russian Steel Fabricators Inc.'s financial position better or worse than the average for the industry?