(Preparing common-size financialstatements) As the newest hire to the financial analysis group at Patterson PrintingCompany, you have been asked to perform a basis financial analysis of the companys most recent financial statements. The 2016 balance sheet and income statement for the Patterson are shown here:

Patterson Printing Company

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Balance Sheet, December 31, 2016

Cash and marketable securities

$ 470

Accounts receivable

5,980

Inventory

9,500

Total current assets

$15,950

Net property, plant, and equipment

17,040

Total assets

$32,990

Accounts payable

$7,170

Short-term debt

6,830

Total current liabilities

$14,000

Long-term liabilities

7,050

Total liabilities

$21,050

Total common stockholders' equity

11,940

Total liabilities and stockholders' equity

$32,990

Patterson Printing Company

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Income Statement for the Year Ended December 31, 2016

Revenues

$30,040

Cost of goods sold

(19,960)

Gross profit

$10,080

Operating expenses

(8,000)

Net operating income

$2,080

Interest expense

(950)

Earnings before taxes

$1,130

Income taxes

(411)

Net income

$719

.

a. After discussing your training assignment with a fellow analyst who was hired last year, you learn that the first step in your completing the assignment is to prepare a common-size balance sheet for Patterson.

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Common-Size Balance Sheet		2016
Cash and marketable securities	$	470		%
Accounts receivable		5,980
Inventory		9,500
Total current assets	$	15,950		%
Net property, plant, and equipment		17,040
Total assets	$	32,990		%
Accounts payable	$	7,170		%
Short-term debt		6,830
Total current liabilities	$	14,000		%
Long-term liabilities		7,050
Total liabilities	$	21,050		%
Total common stockholders equity		11,940
Total liabilities and shareholders equity	$	32,990		%

b. The second step is to prepare a common-size income statement for the firm.

Complete the common-size income statement below:(Round to one decimal place.)

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Common-Size Income Statement		2016
Revenues	$	30,040		%
Cost of goods sold		(19,960)
Gross profit	$	10,080		%
Operating expenses		(8,000)
Net operating income	$	2,080		%
Interest expense		(950)
Earnings before taxes	$	1,130		%
Income taxes		(411)
Net income	$	719		%