Requirement 1. Prepare a vertical analysis for McConnell for both its income statement and balance sheet.

McConnell Department Stores, Inc.
Income Statement
Year Ended December 31, 2018
	Amount	Percent of Total
Net Sales Revenue	$777,000		%
Cost of Goods Sold	522,144		%
Gross Profit	254,856		%
Operating Expenses	158,508		%
Operating Income	96,348		%
Other Expenses	7,770		%
Net Income	$88,578		%

Prepare a vertical analysis for McConnell for its balance sheet.

McConnell Department Stores, Inc.
Balance Sheet
December 31, 2018
	Amount	Percent of Total
Current Assets	$310,500		%
Property, Plant, and Equipment, Net	116,840		%
Intangible Assets, Net	8,280		%
Other Assets	24,380		%
Total Assets	$460,000		%
Current Liabilities	$211,600		%
Long-term Liabilities	105,800		%
Total Liabilities	317,400		%
Stockholders' Equity	142,600		%
Total Liabilities and Stockholders' Equity	$460,000		%

Requirement 2. Compare the company's profit performance and financial position with the average for the industry. McConnell's gross profit percentage and profit margin ratio are both (higher than/less than/the same as) the industry average, which indicates a (comparable/Favorable/unfavorable) profit performance as compared with the industry.

The company showed a slightly (higher/lower) investment in fixed and intangible assets than the industry average. The company's percentage of debt to total assets is (Higher/lower)

than the industry, which would generally indicate a (Stronger/weaker )financial position than the average for the industry.

McConnell Department Stores, Inc.

Income Statement Compared with Industry Average

Year Ended December 31, 2018

Industry

McConnell

Average

Net Sales Revenue

$777,000

100.0 %

Cost of Goods Sold

522,144

65.8

Gross Profit

254,856

34.2

Operating Expenses

158,508

19.7

Operating Income

96,348

14.5

Other Expenses

7,770

0.4

Net Income

$88,578

14.1 %

McConnell Department Stores, Inc.

Balance Sheet Compared with Industry Average

December 31, 2018

Industry

McConnell

Average

Current Assets

$310,500

70.9 %

Property, Plant, and Equipment, Net

116,840

23.6

Intangible Assets, Net

8,280

0.8

Other Assets

24,380

4.7

Total Assets

$460,000

100.0 %

Current Liabilities

$211,600

48.1 %

Long-term Liabilities

105,800

16.6

Total Liabilities

317,400

64.7

Stockholders' Equity

142,600

35.3

Total Liabilities and Stockholders' Equity

$460,000

100.0 %