Financial and Managerial Accounting: P14-1 Comparative statement data for Farris and Ratzlaff

Financial and Managerial Accounting P14-1 Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appear below. All balance sheet data are as of December 31, 2017, and December 31, 2016. Farris Company Ratzlaff Company 2017 2016 2017 2016Net sales 1,565,000 339,300 Cost of goods sold 1,040,000 240,900 Operating expenses 300,100 78,400 Interest expense 8,700 2,700 Income tax expense 54,300 6,700 Current assets 322,500 313,000 82,300 79,800 Plant assets (net) 521,400 498,500 138,300 126,000 Current liabilities 64,200 76,000 34,400 29,000 Long-term liabilities 108,000 91,400 31,000 24,400 Common stock, $10 par 496,500 496,500 123,000 123,000 Retained earnings 175,200 147,600 32,200 29,400  Instructions: a. Prepare a vertical analysis of the 2017 income statement data for Farris Company and Ratzlaff Company in columnar form.(Round percentages to 1 decimal place, e.g. 12.1%.) b. Comment on the relative profitability of the companies by computing the return on assets and the return on common stockholders' equity ratios for both companies. (Round intermediate calculations to 0 decimal places, e.g. 1,250 and the final answers to 1 decimal places, e.g. 10.5%.)
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