Russell Department Stores, Inc.
Income Statement Compared with Industry Average
Year Ended December 31, 2018
		Industry
	Russell	Average
Net Sales Revenue	$780,000	100.0 %
Cost of Goods Sold	524,940	65.8
Gross Profit	255,060	34.2
Operating Expenses	160,680	19.7
Operating Income	94,380	14.5
Other Expenses	5,460	0.4
Net Income	$88,920	14.1 %

Russell Department Stores, Inc.

Balance Sheet Compared with Industry Average

December 31, 2018

Industry

Russell

Average

Current Assets

$316,780

70.9 %

Property, Plant, and Equipment, Net

121,260

23.6

Intangible Assets, Net

7,050

0.8

Other Assets

24,910

4.7

Total Assets

$470,000

100.0 %

Current Liabilities

$215,260

48.1 %

Long-term Liabilities

106,220

16.6

Total Liabilities

321,480

64.7

Stockholders' Equity

148,520

35.3

Total Liabilities and Stockholders' Equity

$470,000

100.0 %

Requirement 1. Prepare a vertical analysis for Russel

for both its income statement and balance sheet.

Russell Department Stores, Inc.
Income Statement
Year Ended December 31, 2018
	Amount	Percent of Total
Net Sales Revenue	$780,000		%
Cost of Goods Sold	524,940		%
Gross Profit	255,060		%
Operating Expenses	160,680		%
Operating Income	94,380		%
Other Expenses	5,460		%
Net Income	$88,920		%

Prepare a vertical analysis for

Russell

for its balance sheet. (Round the percent of total amounts to one decimal place, X.X%.)

Russell Department Stores, Inc.
Balance Sheet
December 31, 2018
	Amount	Percent of Total
Current Assets	$316,780		%
Property, Plant, and Equipment, Net	121,260		%
Intangible Assets, Net	7,050		%
Other Assets	24,910		%
Total Assets	$470,000		%
Current Liabilities	$215,260		%
Long-term Liabilities	106,220		%
Total Liabilities	321,480		%
Stockholders' Equity	148,520		%
Total Liabilities and Stockholders' Equity	$470,000		%

Requirement 2. Compare the company's profit performance and financial position with the average for the industry.

Russell's

gross profit percentage and profit margin ratio are both

higher than

less than

the same as

the industry average, which indicates a(n)

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

financial position than the average for the industry.