Top managers of Tarrant, Inc. have asked you to compare the company's profit performance and financial position with the average for the industry. The company's accountant have given you the business's income statement, balance sheet, and industry data. Tarrant, Inc. Common-Size Income Statement Data Net sales Cost of sales Gross profit Operating expenses Operating income Other expenses Net income (loss) Tarrant, Inc. Industry Average $500,000 100.00% $355,000 57.30% $145,000 42.70% $120,000 29.40% $25,000 13.30% $7,500 2.50% $17.500 10.80% Tarrant, Inc. Common-Size Balance Sheet Data Current assets Plant assets, net Intangible assets, net Other assets Total assets Tarrant, Inc. Industry Average $496,400 72.10% 121,040 19.00% 27,200 4.80% 35,360 4.10% S680,000 100.00% Current liabilities Long-term liabilities Stockholder's equity Total liabilities and stockholder's equity $266,560 144,160 269,280 S680.000 47.20% 21.00% 31.80% 100.00% Requirements: 1. Prepare a common-size income statement and balance sheet for Tarrant, Inc. The first column of each statement should present the company's common-size statement, and the second column should show the industry averages. 2. For the profitability analysis, compare the company's: (2) ratio of gross profit to neet sales (b) ratio of operating income to net sales, (c) ratio of net income to net sales with the industry averages Is the company's profit performance better or worse than the average for the industry? 3.For the analysis of financial position, calculate Tarrant, Inc. (a) ratios of current assets and current liabilities to total assets (b) ratio of stockholder's equity to total assets Compare these ratios with the industry averages. Is the company's financial performance better or worse than the average for the industry