Verifine Used Auto Sales asked for your help in comparing the company€™s profit performance and financial position with the average for the auto sales industry. The proprietor has given you the company€™s income statement and balance sheet as well as the industry average data for retailers of used autos.

Requirements
1. Prepare a two-column, common-size income statement and a two-column, common-size balance sheet for Verifine Used Auto Sales. The first column of each statement should present Verifine Used Auto Sales€™ common-size statement and the second column should show the industry averages.
2. For the profitability analysis, examine Verifine Used Auto Sales€™ (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. Compare these figures with the industry averages. Is Verifine Used Auto Sales€™ profit performance better or worse than the industry average?
3. For the analysis of financial position, examine Verifine Used Auto Sales€™ (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 Verifine Used Auto Sales€™ financial position better or worse than the industry average?

Verifine Used Auto Sales Income Statement Compared with Industry Average Year Ended December 31, 2014 INDUSTRY AVERAGE VERIFINE Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Other Expenses Net Income $548,000 348,528 199,472 122,752 76,720 1,096 S 75,624 100.0% 62.1% 37.9% 27 8% 10.1% 0.4% 9.7% Verifine Used Auto Sales Balance Sheet Compared with Industry Average December 31, 2014 INDUSTRY AVERAGE VERIFINE Current Assets Plant Assets, Net Intangible Assets, Net Other Assets Total Assets $229,034 50,830 8,970 10,166 $299,000 703% 23.6% 0.8% 47% 100.0% Current Liabilities Long-Term Liabilities Shareholders' Equity Total Liabilities and Shareholders' Equity $118,105 50,830 130,065 $299,000 48.1% 16.6% 35.3% 100.0%