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

Required
1. Prepare a vertical analysis for McConnell for both its income statement and balance sheet.
2. Compare the company's gross margin and profit margin ratios with the average for the industry. Comment on their investment in assets as well as their debt to assets compared to the industry information shown.

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MCCONNELL DEPARTMENT STORES INC Balance Sheet Compared with Industry Average December 31,2017 Industry McConnell Average Current assets $325,440 709% Property, plant, and equipment Intangible assets, net Other assets Total assets 120,960 8,640 24,960 $480,000 23.6 0.8 4.7 100.0% Current liabilities Long-term liabilities Total liabilities Shareholders' equity Total liabilities and $222,720 107,520 330,240 149,760 48.1% 16.6 64.7 35.3 shareholders' equity $480,000 100.0% MCCONNELL DEPARTMENT STORES INC Income Statement Compared with Industry Average For the Year Ended December 31,2017 Net sales Cost of goods sold Gross margin Operating expenses Operating income Other expenses Net income McConnell $778,000 522,816 255,184 161,046 94,138 4,668 $ 89,470 Industry Average 100.0% 65.8 34.2 19.7 14.5 0.4 14.1%