Question

The Roost Department Stores, Inc. thief executive officer (CEO) has asked you to cumpere the company's proft performance and inancial 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 (Cick the icon to view the income statement) (Clik the ican to view the balance sheet) Reed ereairemerts Pats table Requirement 1. Prepare a common-sice income statement end balence sheet for Roost efirst column of each stalement should present Roost's common-sice stalement, and the secund column, the industry averages. Bagin by praparing tha cammon- e income statement tor Roost (Round your answers to one decimal place, X.X3%. XI Roost Department Stores, Inc. Dala Table i. Roost Department Stores, Inc Requirements Ralance Shee lustry Avarage Common Size Incoms Statement ecember 31, 2018 Year Ended December 31, 2018 Roost Department Stores, Inc. Industry Ruost Industry Averuge 1 Roost Average carh ctatsment shoud crosent Rocts.common.cize ttement and the cocond.column the Income Statement Companed with Industry Average Nat Salas Ravan industry verages Year Ended December 31, 2018 Current Assets 330,260 70.9 % a Sold Industry atie, Compare these figurcs with the industry averagcs, ls Ropsts proft perfonmance bectter or Propaty, Plant, and Equipment, Nat 123.480 236 Geee Prod 34.2 % Roost Average Intangble Asset, Ne Q. 19.7 Fee e anabisic of financial ooallon compute Rooafs (a) currant ratio and (h) daht to auity Operaing Expenses Ne Seles D Re Other Assets rad. Campretc rdo with im Indty average m curet rabe Induty Operaing Incom 145% 573 380 490.000 100.0% Suld Total Assets batter or warse than the industry avarages? 04 Cthar Expanses Groes Pret 256,620 342 14.1. Net Inoome 160.600 19.7 Oparating Expensas. Current Liabilifies 226 380 48.1 % Print Done 111 720 16 6 Operating Incom 95.940 14.5 Long-term Liabilties 5450 0 Other Expeses Jatal Liabilitios 338.100 64 90.450 14.1% 151.900 Stockholdars Equity Net Income 100.0 % 490,000 Tatal Liahillies and Stockholdars Equity Print Done Prnt one

Answer 1

A B C D E 1 Requirement 1 2 3 Roost Deparment Stores Inc. Common Size Income Statement 5 Year Ended December 31, 2018 Industry Average Roost 6 7 Net Sales Revenue 100.0% 100.0% 67.1%|(523,380/780,000)*100 32.9%|(256,620/780,000*100 20.6%|(160,680/780,000) 100 12.3%| (95,940/780,000)*100 0.7% (5,450/780,000)*100 11.6 %| (90,480/780,000)*100 8 Cost of Goods Sold 65.8% 9 Gross Profit 10 Operating Expenses 11 Operating Income 12 Other Expenses 13 Net income 34.2% 19.7% 14.5% 0.4% 14.1% 14 15 Requirement 2 16 (a) Gross profit percentage for Roost is 32.9% which is worse than industry average of 34.2 % 17 (b) Profit margin ratio for Roost 11.6 % which is worse than the industry average of 14.1% 10

19 Requirement 3 20 Current Ratio Current Assets 21 Current Liabilities 22 Current Ratio $ 3,30,260 $ 23 2,26,380 24 Current Ratio 1.46 25 26 Debt to Equity Ratio Total Liabilities 27 Stockolders' Equity 28 Debt to Equity Ratio 3,38,100 29 1,51,900 30 Debt to Equity Ratio 2.23 31 32 Roosts' current ratio of 1.46 is worse than the industry average of 1.47 33 Roosts' Debt to Equity Ratio of 2.23 is more than the industry average of 1.83 which is worse