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.