Wolverine World Wide Inc. prides itself as being the "world*s leading marketer of U.S. branded nonathletic footwear." It competes in many markets with Timberland, often offering products at a lower price point. The following data were taken from its recent annual report (in thousands):

Required: 1. Based on these data, prepare a multiple-step income statement (showing both gross profit and income from operations). There were no extraordinary items. Include a Percentage Analysis column. 2. How much was the gross profit margin? What was the gross profit percentage ratio? Explain what these two amounts mean. Compare the gross profit percentage with that of Timberland. What do you believe accounts for the difference?

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Sales of merchandise Income taxes Cash dividends declared Selling and administrative expense $413.957 10.047 2,347 85.993 Cost of products sold Interest expense Other income Items not included in above amounts: Number of shares of common stock outstanding. 17,114 290.469 3.678 297