1. The McConnel Department Stores, Inc. chief executive officer (CEO) has asked you to compare the companys profit performance and financial position with the average for the industry. The CEO has given you the companys invome statement and balance sheet, as well as the industry average data for retailers.

Problem Requirements: a. Prepare a vertical analysis for McConnell for both its income statement and balance sheet. b. Compare the companys profit performance and financial position with the average for the industry.

McConnell Department Stores, Inc

Income Statement Compared with Industry Average

Year Ended December 31, 2014

	McConnell	Industry Average
Net Sales	$778,000	100.0%
Cost of Goods Sold	523,594	65.8%
Gross Profit	254,406	34.2%
Operating Expenses	161,046	19.7%
Operating Income	93,360	14.5%
Other Expenses	4,668	0.4%
Net Income	88,692	14.1%

McConnell Department Stores Inc. Balance Sheet COmpared with Industry Average December 31, 2014

	McConnell	Industry Average
Current Assets	$317,250	70.9%
Fixed Assets, Net	122,200	23.6%
Intangible Assets, Net	5,640	0.8%
Other Assets	24,910	4.7%
Total Assets	$470000	100.0%
Current Liabilities	$219,960	48.1%
Long-term liabilities	103400	16.6%
total liabilities	323,360	64.7%
stockholders equity	146,640	35.3%
total liabiltieis and stockholders equity	$470000	100%