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FranklinFranklin Department$$ Stores' chief executive officer$($CEO$)$ has asked you to compare the$$ company's profit performance and financial position with the average 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. Requirement $2.$ For the profitability$$ analysis, compute FranklinFranklin Department$$ Stores' $($a$)$ ratio of gross profit to$$ sales, $($b$)$ ratio of operating income to$$ sales, and$($c$)$ ratio of net income to sales. Compare these figures with the industry averages. Is FranklinFranklin Department$$ Stores' profit performance better or worse than the industry$$ average?

FranklinFranklin$\text{'}$s $$common$-$size income statement shows that its ratios of gross$$ profit, operating$$ income, and net income to sales are

$$

than the industry averages.$$ Overall, FranklinFranklin$\text{'}$s profit performance is

$$

better

worse

than average for the industry.

Part $4$

Requirement $3.$ For the analysis of financial$$ position, compute FranklinFranklin Department$$ Stores' $($a$)$ ratio of current assets to total assets and$($b$)$ ratio of$$ stockholders' equity to total assets. Compare these ratios with the industry averages. Is FranklinFranklin Department$$ Stores' financial position better or worse than the industry$$ averages?

FranklinFranklin$\text{'}$s $$common$-$size balance sheet shows that its ratio of current assets to total assets and its ratio of$$ stockholders' equity to total assets are

$$

better

worse

than the industry averages.$$ Overall, FranklinFranklin$\text{'}$s financial position is

$$

better

worse

than average for the industry.

Franklin's common$-$size income statement shows that its ratios of gross profit, operating income, and net income to sales areFranklinOverall, Franklin's profit performance isthan average for the industry.Franklin's common$-$size balance sheet shows that its ratio of current assets to total assets and its ratio of stockholders' equity to total assets areFranklinOverall, Franklin's financial position isthan average for the industry.$($Click the icon to view the income statement.$)$

$($Click the icon to view the balance sheet.$)$ Read the requirements. Requirement $2.$ Decide$($a$)$ whether BanfieldBanfield$\text{'}$s ability to pay debts and to sell inventory improved or deteriorated during $20202020$ and$($b$)$ whether the investment attractiveness of its common stock appears to have increased or decreased.

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