P18-2 Vertical analysis [20–30 min] The McConnell Department Stores Pty Ltd's 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. MCCONNELL DEPARTMENT STORES PTY LTD Income statement compared with industry average for the year ended 31 December 2016 McConnell Industry average Net sales $778 000 100.0% Cost of sales 522 816 65.8 $255 184 Gross profit Selling and general expenses 34.2 161 046 19.7 Other expenses 4 668 0.4 Profit $ 89 470 14.1% MCCONNELL DEPARTMENT STORES PTY LTD Balance sheet compared with industry average as at 31 December 2016 McConnell Industry average Current assets $325 440 70.9% Property, plant and equipment, net Intangible assets, net 120 960 23.6 8 640 0.8 Other assets 24 960 4.7 Total assets $480 000 100.0% Current liabilities $222 720 48.1 Non-current liabilities 107 520 16.6 Shareholders' equity Total liabilities and shareholders' equity 149 760 35.3 $480 000 100.0% Requirement Prepare a vertical analysis for McConnell for both its income statement and its balance sheet.

P18-2 Vertical analysis [20–30 min] The McConnell Department Stores Pty Ltd's 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. MCCONNELL DEPARTMENT STORES PTY LTD Income statement compared with industry average for the year ended 31 December 2016 McConnell Industry average Net sales $778 000 100.0% Cost of sales 522 816 65.8 $255 184 Gross profit Selling and general expenses 34.2 161 046 19.7 Other expenses 4 668 0.4 Profit $ 89 470 14.1% MCCONNELL DEPARTMENT STORES PTY LTD Balance sheet compared with industry average as at 31 December 2016 McConnell Industry average Current assets $325 440 70.9% Property, plant and equipment, net Intangible assets, net 120 960 23.6 8 640 0.8 Other assets 24 960 4.7 Total assets $480 000 100.0% Current liabilities $222 720 48.1 Non-current liabilities 107 520 16.6 Shareholders' equity Total liabilities and shareholders' equity 149 760 35.3 $480 000 100.0% Requirement Prepare a vertical analysis for McConnell for both its income statement and its balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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