The purpose of this assessment is to determine current ratio and debt to equity ratio and understand the importance of these ratios in determining the financial health of an organization.

The Roost Department Stores, Inc.s chief executive officer (CEO) has asked you to compare the companys profit performance and financial position with the averages for the industry. The CEO has given you the following companys income statement and balance sheet as well as the industry average data for retailers:

Income Statement:

Roost Department Stores, Inc. Income Statement Compared with Industry Average Year Ended December 31, 2016
	Roost	Industry Average
Net sales	$779,000	100%
Cost of goods sold	$526,604	65.8%
Gross profit	$252,396	34.2%
Operating expenses	$163,590	19.7%
Operating income	$88,806	14.5%
Other expenses	$5,453	0.4%
Net Income	$83,353	14.1%

Balance Sheet:

Roost Department Stores, Inc. Balance Sheet Compared with Industry Average December 31, 2016
	Roost	Industry Average
Current assets	$316,780	70.9%
Fixed assets, Net	$120,320	23.6%
Intangible assets, Net	$7,990	0.8%
Other assets	$24,910	4.7%
Total assets	$470,000	100%
Current liabilities	$217,140	48.1%
Long-term liabilities	$104,340	16.6%
Total liabilities	$321,480	64.7%
Stockholders equity	$148,520	35.3%
Total Liabilities and Stockholders Equity	$470,000	100%

Based on this data, answer the following questions:

1. Prepare a common-size income statement and balance sheet, respectively, for Roost. The first column of each statement should present Roosts common-size statement, and the second column, the industry averages. Rename the worksheets, replacing nn with your initials.

2. For the profitability analysis, compute Roosts gross profit percentage and profit margin ratio. Compare these figures with the industry averages. Is Roosts profit performance better or worse than the industry average?

3. For the analysis of financial position, compute Roosts current ratio and debt to equity ratio. Compare these ratios with the industry averages. Assume the current ratio industry average is 1.47, and the debt to equity industry average is 1.83. Is Roosts financial position better or worse than the industry averages?