Performing vertical analysisThe Klein 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.RequirementsPrepare a vertical analysis for Klein for both its income statement and balance sheet.Compare the company’s profit performance and financial position with the average for the industry. KLEIN DEPARTMENT STORES, INC.Income Statement Compared with Industry AverageYear Ended December 31, 2018KLEIN DEPARTMENT STORES, INC.Balance Sheet Compared with Industry AverageDecember 31, 2018IndustryAverage100.0%IndustryAverageKleinKleinNet Sales RevenueCost of Goods SoldGross ProfitOperating ExpensesOperating IncomeOther ExpensesNet Income$ 778,000Current Assets$ 339,00070.9%524,37265.8Property, Plant, and Equipment, Net130,00023.6253,62834.2Intangible Assets, Net7,0000.8159,49019.7Other Assets24,0004.794, 13814.5Total Assets$ 500,000100.0%6,2240.4S 87,91414.1%Current Liabilitie.$ 232,00048.1%Long-term Liabilities111,00016.6Total Liabilities343,00064.7Stockholders' Equlty157,00035.3Total Liabilities and Stockholders' Equity $ 500,000100.0%

Answered: KLEIN DEPARTMENT STORES, INC. Income…

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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Performing vertical analysis

The Klein 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.

Requirements

Prepare a vertical analysis for Klein for both its income statement and balance sheet.
Compare the company’s profit performance and financial position with the average for the industry.

KLEIN DEPARTMENT STORES, INC.
Income Statement Compared with Industry Average
Year Ended December 31, 2018
KLEIN DEPARTMENT STORES, INC.
Balance Sheet Compared with Industry Average
December 31, 2018
Industry
Average
100.0%
Industry
Average
Klein
Klein
Net Sales Revenue
Cost of Goods Sold
Gross Profit
Operating Expenses
Operating Income
Other Expenses
Net Income
$ 778,000
Current Assets
$ 339,000
70.9%
524,372
65.8
Property, Plant, and Equipment, Net
130,000
23.6
253,628
34.2
Intangible Assets, Net
7,000
0.8
159,490
19.7
Other Assets
24,000
4.7
94, 138
14.5
Total Assets
$ 500,000
100.0%
6,224
0.4
S 87,914
14.1%
Current Liabilitie.
$ 232,000
48.1%
Long-term Liabilities
111,000
16.6
Total Liabilities
343,000
64.7
Stockholders' Equlty
157,000
35.3
Total Liabilities and Stockholders' Equity $ 500,000
100.0%

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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