Top managers of McDonough Products, Inc., have asked you to compare the company's profit performance and financial position with the average for the industry. The company's accountant has given you the business's income statement, balance sheet, and industry data: E: (Click the icon to view the income statement.) (Click the icon to view the balance sheet.) Read the requirements % 57.3 % % % 29.4 % % 13.3 % 2.5% Requirement 1. Prepare a common-size income statement and balance sheet for McDonough Products. The first column of each statement should present the company's common-size statement, and the second column should show the industry averages. (Round the percentages to the nearest one-tenth percent, X.X%.) Start by preparing a common-size income statement for McDonough Products, Inc. McDonough Products, Inc. - X Common-Size Income Statement Compared with Industry Average Data table Year Ended December 31, 2018 X Data table Industry McDonough Average McDonough Products, Inc. Net sales 100.0 % McDonough Products, Inc. Balance Sheet Compared with Industry Average Cost of goods sold Income Statement Compared with Industry Average December 31, 2018 Gross profit 42.7 % Year Ended December 31, 2018 Industry Industry McDonough Operating expenses Average Current assets S McDonough 305,000 Operating income 72.1 % Average 89,000 19.0 Other expenses Plant assets, net % Net sales $ 1,000,000 100.0 % 690,000 57.3 Intangible assets, net 16.000 Cost of goods sold 4.8 Net income 90,000 4.1 Gross profit 310,000 Other assets 42.7 S 100.0 % 240,000 500,000 Total Operating expenses Requirements Operating income 70.000 13.3 10.000 2.5 Current liabilities S 240.000 47.2 % Other expenses $ 60,000 Long-term liabilities 105,000 21.0 1. Prepare a common-size income statement and balance sheet for Net income 155,000 31.8 McDonough Products. The first column of each statement should present the Stockholders' equity company's common-size statement, and the second column should show the $ 500,000 industry averages 2. For the profitability analysis, compare the company's (a) ratio of gross profit to net sales, (b) ratio of operating income to net sales, and (c) ratio of net Print Done income to net sales with the industry averages. Is the company's profit performance better or worse than the average for the industry? Print Done 3. For the analysis of financial position, compare McDonough Products' (a) ratios of current assets and current liabilities to total assets and (b) ratio of stockholders' equity to total assets. Compare these ratios with the industry averages. Is the company's financial position better or worse than the average for the industry? Clear all Check answer 10.8 % 29.4 10.8 % Total 100.0 %