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ACCT 212: Course Project 2

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Question;ACCT 212: Course;Project 2;Learning Objectives;Preparing common-size statements, analyzing;profitability, making comparisons with the industry;P13-50A Top managers of O'Hare Products, Inc., have asked for your;help incomparing the;company?s profit performance and financial position with the average for the;industry. The accountant has given you the company?s income statement and;balance sheet and also the following data for the industry. The problem is that O'Hare is in dollars;and the Industry Average is in percentages.;To complete the analysis you will need to convert O'Hare's dollar;amounts to percentages.;O'Hare Products, Inc.;Income Statement Compared with Industry Average;Year Ended December 31, 2012;O'Hare;Industry;Average;\$ 960,000;100.0%;662,400;57.3%;297,600;42.7%;220,800;29.4%;76,800;13.3%;9,600;2.5%;\$ 67,200;10.8%;O'Hare Products, Inc.;Balance Sheet Compared with Industry Average;December 31, 2012;O'Hare;Industry;Average;\$ 292,000;72.1%;72,800;19.0%;14,000;4.8%;21,200;4.1%;400,000;100.0%;188,000;47.2%;84,000;21.0%;128,000;31.8%;\$ 400,000;100.0%;Requirements;Prepare a common-size;income statement and balance sheet for O?Hare Products. The first column of;each statement should present O?Hare Products? common-size statement, and the;second column should show the industry averages.;For the profitability;analysis, compare O?Hare Products? (a) ratio of gross profit to net sales;(b) ratio of operating income to net sales, and (c) ratio of net income to;net sales with the industry averages. Is O?Hare Products? profit performance;better or worse than the average for the industry?;For the analysis of;financial position, compute O?Hare Products? (a) ratios of current assets and;current liabilities to total assets and (b) ratio of stockholders? equity to;total assets. Compare these ratios with the industry averages. Is O?Hare;Products? financial position better or worse than the average for the;industry?

Paper#41560 | Written in 18-Jul-2015

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