problem: Comparative statement information for Douglas and Maulder Company, two (2) competitors, appear below. All balance sheet data are as of December 31, 2009, & December 31, 2008.
|
Douglas Company Maulder Company
|
|
|
2009
|
2008
|
2009
|
2008
|
|
Net sales
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$1,549,035
|
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$339,038
|
|
|
Cost of goods sold
|
1,080,490
|
|
241,000
|
|
|
Operating expenses
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79,000
|
|
302,275
|
|
|
Interest expense
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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
|
Instructions;
[A] Make a vertical analysis of the 2009 income statement information for Douglas firm and Maulder firm in columnar form.
[B] Comment on the relative profitability of the companies by calculating the return on assets & the return on common stockholders' equity ratios for both firms. Be sure to show your computations for each ratio using M.S. Excel [the details of the information used to compute].