Data table Income Statement Compared with Industry Average Year Ended December 31, 2018 Industry McDonough Average Net sales $ 500,000 100.0 % 340,000 57.3 Cost of goods sold Gross profit 160,000 42.7 130,000 29.4 Operating expenses Operating income 30,000 13.3 2,500 2.5 Other expenses $ 27,500 10.8 % Net income Print Done - X Data table Current assets Plant assets, net Intangible assets, net Other assets Total - X McDonough Average $ 375,000 72.1 % 92,500 19.0 20,000 4.8 12,500 4.1 $ 500,000 100.0% es Current liabilities S 230,000 47.2% Long-term liabilities 107,500 21.0 162,500 Stockholders' equity 31.8 $ 500,000 100.0% Total Print Done Requirements 1. Prepare a common-size income statement and balance sheet for McDonough Products. The first column of each statement should present the company's common-size statement, and the second column should show the industry averages. 2. For the profitability analysis, compare the company's (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 with the industry averages. Is the company's profit performance better or worse than the average for the industry? 3. For the analysis of financial position, compare McDonough Products (a) ratios of current assets and current liabilities to total assets and (b) ratio of stockholders' equity to total assets. Compare these ratios with the industry averages. Is the company's financial position better or worse than the average for the industry? Print Done X a Top managers of McDonough Products, Inc., have asked you to compare the company's profit performance and financial position with the average for the industry. The company's accountant has given you the business's Income statement, balance sheet, and industry data: (Click the icon to view the income statement.) (Click the icon to view the balance sheet.) Read the requirements Requirement 1. Prepare a common-size income statement and balance sheet for McDonough Products. The first column of each statement should present the company's common-size statement, and the second column should show the industry averages. (Round the percentages to the nearest one-tenth percent, XX%) Start by preparing a common-size income statement for McDonough Products, Inc. McDonough Products, Inc. Common-Size Income Statement Compared with Industry Average Year Ended December 31, 2018 Net sales Industry McDonough Average 100.0 % Top managers of McDonough Products, Inc. have asked you to compare the company's profit performance and financial position with the average for the industry. The company's accountant has given you the business's income statement, balance sheet, and industry data: (Click the icon to view the income statement) (Click the icon to view the balance sheet) Read the requirements Net sales Cost of goods sold Gross profit Operating expenses Operating income Other expenses Net income McDonough Average 100.0% 57.3% 42.7% 29.4% 13.3% 25% 10.8 %