- Please refer to the following Income Statement and Balance Sheet (see attached picture):Prepare a vertical analysis for both the income statement and balance sheet.Write a paragraph comparing the company’s performance with the industry average.Compute the following ratios and comment on what the results mean when evaluating the company: Current ratio Gross profit percentage ratio Debt ratio Profit margin ratio RANDALL DEPARTMENT STORES, INC.Income Statement Compared with Industry AverageYear Ended December 31, 2018RANDALL DEPARTMENT STORES, INC.Balance Sheet Compared with Industry AverageDecember 31, 2018IndustryAverageIndustryAverageRandallRandallNet Sales Revenue$ 783,000100.0%$ 310,04070.9%Current AssetsCost of Goods Sold527,74265.8Property, Plant, and Equipment, Net119,60023.6Gross Profit255,25834.2Intangible Assets, Net7,3600.8Operating Expenses163,64719.7Other Assets23,0004.7Operating Income91,61114.5Total Assets$ 460,000100.0%Other Expenses6,2640.4Net Income$ 85,34714.1%Current Liabilities$ 210,68048.1%Long-term Liabilities103,96016.6Total Liabilities314,64064.7Stockholders' Equity145,36035.3Total Liabilities and Stockholders' Equity $ 460,000100.0%

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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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- Please refer to the following Income Statement and Balance Sheet (see attached picture):

Prepare a vertical analysis for both the income statement and balance sheet.
Write a paragraph comparing the company’s performance with the industry average.
Compute the following ratios and comment on what the results mean when evaluating the company:

Current ratio

Gross profit percentage ratio

Debt ratio

Profit margin ratio

RANDALL DEPARTMENT STORES, INC.
Income Statement Compared with Industry Average
Year Ended December 31, 2018
RANDALL DEPARTMENT STORES, INC.
Balance Sheet Compared with Industry Average
December 31, 2018
Industry
Average
Industry
Average
Randall
Randall
Net Sales Revenue
$ 783,000
100.0%
$ 310,040
70.9%
Current Assets
Cost of Goods Sold
527,742
65.8
Property, Plant, and Equipment, Net
119,600
23.6
Gross Profit
255,258
34.2
Intangible Assets, Net
7,360
0.8
Operating Expenses
163,647
19.7
Other Assets
23,000
4.7
Operating Income
91,611
14.5
Total Assets
$ 460,000
100.0%
Other Expenses
6,264
0.4
Net Income
$ 85,347
14.1%
Current Liabilities
$ 210,680
48.1%
Long-term Liabilities
103,960
16.6
Total Liabilities
314,640
64.7
Stockholders' Equity
145,360
35.3
Total Liabilities and Stockholders' Equity $ 460,000
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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