19 Jul Accounting Homework
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The
RostRost
Department Stores, Inc., chief executive officer (CEO) has asked you to compare the company’s profit performance and financial position with the average 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. Rost Department Stores, Inc.
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Income Statement Compared with Industry Average
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Year Ended December 31, 2010
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Industry
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Rost
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Average
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Net sales
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$783,000
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100.0 %
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Cost of goods sold
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529,308
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65.8
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Gross profit
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253,692
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34.2
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Operating expenses
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163,647
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19.7
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Operating income
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90,045
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14.5
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Other expenses
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5,481
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0.4
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Net income
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$84,564
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14.1 %
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Rost Department Stores, Inc.
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Balance Sheet Compared with Industry Average
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December 31, 2010
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Industry
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Rost
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Average
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Current assets
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$291,970
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70.9 %
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Fixed assets, net
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108,360
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23.6
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Intangible assets, net
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6,880
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0.8
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Other assets
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22,790
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4.7
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Total assets
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$430,000
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100.0 %
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Current liabilities
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$198,660
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48.1 %
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Long-term liabilities
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94,600
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16.6
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Stockholders’ equity
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136,740
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35.3
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Total liabilities and stockholders’ equity
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$430,000
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100.0 %
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Prepare a common-size income statement for
Department Stores. (Round your answers to one decimal place.)
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Rost Department Stores, Inc.
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Common-Size Income Statement Compared to Industry Average
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Year Ended December 31, 2010
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Rost
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Industry
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(%)
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Average (%)
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Net sales
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100.0
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Cost of goods sold
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65.8
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Gross profit
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34.2
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Operating expenses
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19.7
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Operating income
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14.5
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Other expenses
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0.4
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Net income
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14.1
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