Listed is the 2018 income statement and other financial data for Perez & Serrano Co. Perez & Serrano Co. Income Statement for the year ending December 31, 2018 (in thousands of dollars, except EPS, DPS, BVPS, MVPS) $4980 Net sales Cost of goods sold Gross profits 2246 $2734 Other operating expenses Earnings before interest, taxes and 125 $2609 depreciation Depreciation 200 Earnings before interest and taxes $2409 (EBIT) Interest expenses 315 Earnings before taxes (EBT) Taxes Net income Preferred stock dividends Net income available for common stock $2094 764 $1330 $ 60 $1270 Common stock dividends 395 Addition to retained earnings $ 875 Per (common) share data Earnings per share (EPS) Dividends per share (DPS) $6.34 $1.98 Book value per share (BVPS) Market value (price) per share $19.745 $26.850 Other financial Data for Perez & Serrano Co. Times Interest earned = (interest expense/EBIT) Net profit margin = (Net profit/sales) Operating profits margin = (EBIT/sales) Gross profit margin = (sales - cost of goods sold/sales) Industry 7.25 18.75% 42.02% 49.16% REQUIRED Part I Using Excel or any other electronic sheet; prepare the Common Sized Income Statement for Perez & Serrano Co. Part II Compute the followings profitability ratios, compare with the industry and evaluate the performance of the Perez & Serrano, Inc. using the scale: better, on par or worse. a. Gross profits ratio = b. Operating profits margin = c. Net profit margin = Part III If the gross profits ratio for Perez & Serrano Co. is worse than the industry's gross profit ratio. You are the financial analyst for Perez & Serrano Co. and the management ask you a recommendation for improve that ratio. What would you recommend? Why?