P15-23A 2 Vertical analysis [20-30 min] The McConnell Department Stores, Inc., 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 retailer MCCONNELL DEPARTMENT STORES, INC. Income Statement Compared with Industry Average Year Ended December 31, 2012 Industry McConneAverage $ 778,000 100.0% Net sales Cost of goods sold Gross profit Operating expenses Operating income Other expenses Net income 522,816 S 255,18-4 161,046 $ 94,138 4,668 S 89,470 65.8 34.2 19.7 14.5 0.4 14.1% MCCONNELL DEPARTMENT STORES, INC. Balance Sheet Compared with Industry Average December 31, 2012 Industry McConnel Average $ 325,440 120,960 8,640 24,960 70.9% Current assets Fixed assets, net Intangible assets, net Other assets Total assets Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity 23.6 0.8 4.7 $ 480,000 100.0% $ 222,720| 48.1% 107,520 16.6 35.3 100.0% 149,760 Requirement Prepare a vertical analysis for McConnell for both its income statement and bal- ance sheet. 1. P15-23A 2 Vertical analysis [20-30 min] The McConnell Department Stores, Inc., 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 retailer MCCONNELL DEPARTMENT STORES, INC. Income Statement Compared with Industry Average Year Ended December 31, 2012 Industry McConneAverage $ 778,000 100.0% Net sales Cost of goods sold Gross profit Operating expenses Operating income Other expenses Net income 522,816 S 255,18-4 161,046 $ 94,138 4,668 S 89,470 65.8 34.2 19.7 14.5 0.4 14.1% MCCONNELL DEPARTMENT STORES, INC. Balance Sheet Compared with Industry Average December 31, 2012 Industry McConnel Average $ 325,440 120,960 8,640 24,960 70.9% Current assets Fixed assets, net Intangible assets, net Other assets Total assets Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity 23.6 0.8 4.7 $ 480,000 100.0% $ 222,720| 48.1% 107,520 16.6 35.3 100.0% 149,760 Requirement Prepare a vertical analysis for McConnell for both its income statement and bal- ance sheet. 1