Question

he Ambrose Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company's profit performance and fi he company's income statement and balance sheet as well as the industry average data for retailers. Click the icon to view the income statement 囲(Click the icon to view the balance sheet. Read the requirements. Ambrose Department Stores, Inc Common-Size Income Statement Year Ended December 31, 2018 Ambrose Industry Average 100.01% 100.0 % 65.8 34.2 % 19.7 14.5 % 0.4 14.1 Net Sales Revenue Cost of Goods Sold Gross Profit 67.6 32.4% 20.6 11.81% Operating Income Other Expenses Net Income Prepare a common-size balance sheet for Ambrose. (Round your answers to one decimal place, XX%.) 0.9 10.9 %

Answer 1

Requirment 2
(a) Compute Ambrose's gross profit percentage.
Gross profit percentage = Gross profit / Net sales	32.40%
(b) Compute Ambrose's profit margin ratio.
Profit margin ratio = Net income / Net sales	10.90%
c)
Ambrose's gross profit percentage is Worse than the industry averages and profit margin ratio is Worse than the industry average.
Requirement 3
a) Current ratio =Total current assets / Total current liabilities
Current Ratio = 323040 /220800	1.46	times
b) Debt to equity ratio =Total liabilities / Total equity
Debt to equity ratio = 328320/151680	2.16
c)
Ambrose Current Ratio is close to industry average and Debt equity ratio is significantly Worse than industry average