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Q1) Comparative statement data for Douglas Company and Maulder Company, two competitors, appear below. All balance sheet data are as of December 31, 2009, and December 31, 2008.

 

Douglas Company

Maulder Company

 

2009

2008

2009

2008

Net sales

$1,549,035

 

$339,038

 

Cost of goods sold

1,080,490

 

241,000

 

Operating expenses

302,275

 

79,000

 

Interest expense

8,980

 

2,252

 

Income tax expense

 

54,500

 

6,650

Current assets

325,975

$312,410

83,336

$79,467

Plant assets (net)

521,310

500,000

139,728

125,812

Current liabilities

65,325

75,815

35,348

30,281

Long-term liabilities

108,500

90,000

29,620

25,000

Common stock, $10 par

500,000

500,000

120,000

120,000

Retained earnings

173,460

146,595

38,096

29,998

(a) Make vertical analysis of 2009 income statement data for Douglas Company and Maulder Company in columnar form.

(b) Comment on relative profitability of companies by calculating return on assets and return on common stockholders' equity ratios for both companies.

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  • Category:- Accounting Basics
  • Reference No.:- M917207

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