Question
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
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.
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