Ambrose Department Stores' chief executive officer (CEO) has asked you to compare the company's profit performance and financial position with the average for the industry. The CEO has given you the company's income statement and balance sheet, as well as the industry average data for retailers. Click the icon to view the income statement.) Click the icon to view the balance sheet.) Read the requirements Ambrose Department Stores' chief executive officer (CEO) has asked you to compare the company's profit performance and financial position with the average for the industry. The CEO has given you the company's income statement and balance sheet, as well as the industry average data for retailers. ..... Requirement 1. Prepare a common-size income statement and balance sheet for Ambrose Department Stores. The first column of each statement should present Ambrose Department Stores' common-size statement, while the second column should present the industry averages. (Round your answers to two decimal places, X.XX.) Start with preparing a common-size income statement. Ambrose Department Stores, Inc. Common-Size Income Statement Compared to Industry Average For the Year Ended December 31 Industry Ambrose (%) Average Sales revenues % 100.0% 65.9% Less: Cost of goods sold % Gross profit % 34.1% 19.9% Less: Operating expenses % Operating income % 14.2% Less: Interest expense % 0.4% Income before income taxes % 13.8% 0.5% Less: Income tax expense % 13.3% Net income Now prepare a common-size balance sheet for Ambrose. (Round your answers to two decimal places, XXX.) Ambrose Department Stores, Inc. Common-Size Balance Sheet Compared with Industry Average As of December 31 Industry Ambrose (%) Average Assets Current assets % 70.9% Fixed assets, net % 23.7% Intangible assets, net % 0.8% 4.6% Other assets % 100.0% Total assets % Liabilities % 48.1% 16.5% % Current liabilities Long-term liabilities Total liabilities Stockholders' equity % 64.6% 35 104 Stockholders' equity Total common stockholders' equity 35.4% 100.0% Total liabilities and equity Requirement 2. For the profitability analysis, compute Ambrose Department Stores' (a) ratio of gross profit to sales, (b) ratio of operating income to sales, and (c) ratio of net income to sales. Compare these figures with the industry averages. Is Ambrose Department Stores' profit performance better or worse than the industry average? than the industry averages. Overall, Ambrose's profit performance is than Ambrose's common-size income statement shows that its ratios of gross profit, operating income, and net income to sales are average for the industry, Requirement 3. For the analysis of financial position, compute Ambrose Department Stores' (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 Ambrose Department Stores' financial position better or worse than the industry averages? than the industry averages. Overall, Ambrose's financial position is Ambrose's common-size balance sheet shows that its ratio of current assets to total assets and its ratio of stockholders' equity to total assets are than average for the industry. - X Data table Data table 5 Ambrose Average 6 Assets 7 Current assets S 332.220 70.9% 23.7% 8 Fixed assets, net 9 Intangible assets, net 128,380 5,880 0.8% 10 Other assets 23,5201 4.6% 3 For the Year Ended December 31 4 (amounts in thousands) Industry 5 Ambrose Average 6 Sales revenues $ 779,000 100.0% 7 Less: Cost of goods sold 527,383 65.9% 8 Gross profit $ 251,617 34.1% 9 Less: Operating expenses 161,253 19.9% 10 Operating income $ 90,364 14.2% 11 Less: Interest expense 1,558 0.4% Income before income $ 88,806 13.8% 11 Total assets S 490,000 100.0% 12 Liabilities 13 Current liabilities S 227,360 48.1% 16.5% 14 Long-term liabilities 15 Total liabilities 110,740 338,100 $ 12 taxes 64.6% 16 13 Less: Income tax expense Stockholders' equity 5,453 0.5% 151,900 $ 13.3% 35.4% 14 Net income 17 Total common stockholders' equity S 83,353 10 TALLA 490 onnl 100 % Print Done Print Done