Wolverine World Wide Inc. prides itself as being the “world’s leading marketer of U.S. branded nonathletic footwear.” It competes in many markets with Deckers, often offering products at a lower price point. Its brands include Wolverine, Bates, Sebago, and Hush Puppies. The following data were taken from its recent annual report (dollars in thousands):
Sales of merchandise ............. $1,141,887
Income taxes ................. 38,645
Cash dividends declared on common stock ..... 16,504
Selling and administrative expense ......... 318,243
Cost of products sold ............... 700,349
Interest expense ............... 2,973
Other income ................ 1,970
Items not included in above amounts:
Number of shares of common stock outstanding 55,030

Required:
1. Based on these data, prepare an income statement (showing both gross profit and income from operations). There were no extraordinary items. Include a “percentage” column (Chapter 5 for a discussion of common-size income statements and percentage analysis).
2. How much was the gross profit margin? What was the gross profit percentage ratio? Explain what these two amounts mean. Compare the gross profit percentage with that of Deckers. What do you believe accounts for the difference?