Chelsey's 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 owner 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 Chelsey’s Auto Sales. The first column of each statement should present Chelsey’s Auto Sales’ common-size statement and the second column should show the industry averages.
2. For the profitability analysis, examine Chelsey’s 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 Chelsey’s Auto Sales’ profit performance better or worse than the industry average?
3. For the analysis of financial position, examine Chelsey’s Auto Sales’: (a) ratio of current assets to total assets; and (b) ratio of stockholders’ equity to total assets. Compare these ratios with the industry averages. Is Chelsey’s Auto Sales’ financial position better or worse than the industry average?

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Chelsey's Auto Sales Income Statement Compared with Industry Average Year Ended December 31, 2016 INDUSTRY CHELSEY'S $521,400 323,600 197,800 151,200 46,600 AVERAGE Net Sales 100.0% 63.2% Cost of Goods Sold 36.8% 27.5% Gross Profit Operating Expenses Operating Income Other Expenses Net Income 9.3% 3,400 0.5% $ 43,200 8.8% Chelsey's Auto Sales Balance Sheet Compared with Industry Average December 31, 2016 INDUSTRY CHELSEY'S AVERAGE Current Assets $211,400 71.2% Fixed Assets, Net 68,100 24.3% Intangible Assets, Net Other Assets 6,400 11,400 $297,300 0.7% 3.8% Total Assets 100.0% Current Liabilities $117,800 48.4% Long-Term Liabilities Stockholders' Equity Total Liabilities and Stockholders' Equity 79,100 100,400 $297,300 16.1% 35.5% 100.0%