Q1) Campers, Inc. produces camping equipment. Shown below for current year is income statement for company and common size summary for industry in which company operates. (Notice that percentages in the right hand column are not for Campers, Inc., but are average percentages for industry.)
|cost of goods Sold
|Gross profit on sale
|General and administrative
|Total operating expenses
|Income tax expenses
|Return on Assets
A. Create two column common size income statement. First column must illustrate for Campers, Inc., all items expressed as percentage of net sales. Second column must show equivalent industry average for data given in the problem. Purpose of this common size statement is to compare operating results of Campers, Inc., with average for industry.
B. Comment specifically on difference between Camper's, Inc., and industry average with respect to gross profit on sales, selling expenses, general and administrative expenses,net income, operating income, and return on assets. Reccomend possible reasons for more significant disparities.