Attachment # 00000740 - acct212_courseproject2_template_03062012.xlsx
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McDonough Products, Inc.Income Statement Compared with Industry AverageYear Ended December 31, 2010McDonoughIndustry AverageNet sales...............................................................................Cost of goods sold..............................................................Gross profit..........................................................................Operating expenses ...........................................................Operating income................................................................Other expenses....................................................................Net income ..........................................................................Balance Sheet Compared with Industry AverageDecember 31, 2010Current assets......................................................................Fixed assets, net .................................................................Intangible assets, net ..........................................................Other assets.........................................................................Total .....................................................................................Current liabilities .................................................................Long-term liabilities ............................................................Stockholders’ equity............................................................Requirements1.Prepare a common-size income statement and balance sheet for McDonough Products. The first column of each statement should present McDonough Products’ common-size statement, and the second column should show the industry averages.2.For the profitability analysis, compute McDonough 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. Compare these figures with the industry averages. Is McDonough Products’ profit performance better or worse than the average for the industry?3.Common-Size Income Statement Compared to Industry AverageMcDonough ProductsIndustry AverageNet sales……………………………………………………Cost of goods sold………………………………………..Gross profit…………………………….…………………..Operating expenses……………………………………….Operating income………………………………………….Other expenses…………………………………………….Net income…………………………………………………Common-Size Balance Sheet Compared to Industry AverageCurrent assets……………………………………………..Fixed assets, net…………………………………………..Intangible assets, net………………………………………Other assets……………………………………………….Total assets………………………………………………..Current liabilities………………………….………………..Long-term liabilities………………………………………..Stockholders’ equity……………………………………….Total liabilities and stockholders’ equity…………………ACCT 212 : Course Project 2Learning Objectives : Preparing common-size statements; analyzing profitability; making comparisons with the industryRequirement #1Requirement #2Requirement #3Project 2 Grading RubricCriteriaExcellentGoodPoorVery PoorPoints awardedCommon Size Analysis: (50 pts poss)Completeness - 25pts poss All requirements are completed in accordance with the directions, labeled and organized well in worksheet.All requirements are completed and mostly follow the directions, labeled and fairly organized in worksheet.Most requirements are completed that mostly follow the directions, missing some labels and only somewhat organized.Many requirements are not completed and/or the directions were generally not followed, missing labels and unorganized.25 pts22-24 pts19-21 pts0-18 ptsAccuracy - 25pts possAll ratios are calculated with accurate results and appropriate terms of expression.80% plus of ratios are calculated with accurate results and mostly appropriate terms of expression.60-79% of ratios are calculated with accurate results and some appropriate terms of expression.Less than 60% of ratios are calculated with accurate results and some appropriate terms of expression.Profitability Ratios: (50 pts poss)Accuracy -25 pts possAnalysis of Financial Position:(50 pts poss)Accuracy - 25 pts possTotal Points EarnedOut of150 ptsFor the analysis of financial position, compute McDonough Products’ (a) Current ratio and (b) Debt ratio. Compare these ratios with the industry averages. Is McDonough Products’ financial position better or worse than the average for the industry?Industry Average Current RatioIndustry Average Total Debt to Total AssetsSee red triangle for helpful hints.Top managers of McDonough Products, Inc., have asked for your help in comparing 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 McDonough is in dollars and the Industry Average is in percentages. To complete the analysis you will need to convert McDonoughs dollar amounts to percentages.
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