Medical Products, Inc. Income Statement Compared with Industry Average Year Ende
ID: 2365839 • Letter: M
Question
Medical Products, Inc.Income Statement Compared with Industry Average
Year Ended December 31, 20X5
Medical "Industry
Average"
Net sales............................................................................... $957,000 100.0%
Cost of goods sold.............................................................. 652,000 55.9
Gross profit.......................................................................... 305,000 44.1
Operating expenses ........................................................... 200,000 28.1
Operating income................................................................ 105,000 16.0
Other expenses.................................................................... 3,000 2.4
Net income .......................................................................... $102,000 13.6%
Medical Products, Inc.
Balance Sheet Compared with Industry Average
December 31, 20X5
Medical "Industry
Average"
Current assets...................................................................... $486,000 74.4%
Fixed assets, net ................................................................. 117,000 20.0
Intangible assets, net .......................................................... 24,000 0.6
Other assets......................................................................... 3,000 5.0
Total ..................................................................................... 630,000 100.0
Current liabilities ................................................................. 245,000 45.6
Long-term liabilities ............................................................ 114,000 19.0
Stockholders’ equity............................................................ 271,000 35.4
Total ..................................................................................... $630,000 100.0%
Requirement #1
Medical Products, Inc.
Common-Size Income Statement Compared to Industry Average
Year Ended December 31, 20X5
Medical Products Industry Average
Net sales……………………………………………………
Cost of goods sold………………………………………..
Gross profit…………………………….…………………..
Operating expenses……………………………………….
Operating income………………………………………….
Other expenses…………………………………………….
Net income…………………………………………………
Medical Products, Inc.
Common-Size Balance Sheet Compared to Industry Average
Year Ended December 31, 20X5
Medical Products Industry Average
Current assets……………………………………………..
Fixed assets, net…………………………………………..
Intangible assets, net………………………………………
Other assets……………………………………………….
Total assets………………………………………………..
Current liabilities………………………….………………..
Long-term liabilities………………………………………..
Stockholders’ equity……………………………………….
Total liabilities and stockholders’ equity…………………
Explanation / Answer
Preparation of comparative income statement: Income statement compared with industry average Actual Average Net sales 100% 100% Cost of goods sold 68.13% 55.90% Gross profit 31.87% 44.10% Operating expenses 20.89% 28.10% Operating income 10.97% 16.00% Other expenses 0.31% 2.40% Net income 10.65% 13.60% Here, Actual is percentage of expesens in total sales. Cost of goods sold is = (652,000/957,000)*100 = 55.90% Preparation of comparitive balance sheet for the month ended: Medical Products, Inc.Balance Sheet Compared with Industry Average
December 31, 20X5
Medical Products, Inc. Common-Size Balance Sheet Compared to Industry Average Year Ended December 31, 20X5 Medical Products Industry Average Actual Average Current assets 77.14% 74.40% Fixed assets, net 18.57% 20% Intangible assets, net 3.80% 0.60% Other assets 0.47% 5% Total assets 100% 100% Current liabilities 38.89% 45.60% Long-term liabilities 18.09% 19% Stockholders’ equity 42.85% 35.40% Total liabilities and stockholders’ equity 100% 100% Income statement compared with industry average Actual Average Net sales 100% 100% Cost of goods sold 68.13% 55.90% Gross profit 31.87% 44.10% Operating expenses 20.89% 28.10% Operating income 10.97% 16.00% Other expenses 0.31% 2.40% Net income 10.65% 13.60%