Comparative statement data for farris company and ratzlaff

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Reference no: EM13478327

Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appear below. All balance sheet data are as of December 31, 2015, and December 31, 2014.


Farris Company

Ratzlaff Company

2015

2014

2015

2014

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

Instructions

(a) Prepare a vertical analysis of the 2015 income statement data for Farris Company and Ratzlaff Company in columnar form.

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

Reference no: EM13478327

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