Reference no: EM132477090

Here are comparative statement data for Duke Company and Lord Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016.

                  Duke Company                                 Lord Company

                           2017 2016                                              2017 2016

Net sales          $1,849,000                              $546,000

Cost of goods sold 1,063,200                         289,000

Operating expenses 240,000                           82,000

Interest expense 6,800                                    3,600

Income tax expense 62,000                            28,000

Current assets 325,975                                $312,410

                             83,336                         $ 79,467

Plant assets (net) 526,800                         500,000

                              139,728                    125,812

Current liabilities 66,325                            75,815

                              35,348                       30,281

Long-term liabilities 113,990                     90,000

                               29,620                 25,000

Common stock, $10 par 500,000           500,000

                                 120,000              120,000

Retained earnings      172,460              146,595

                                 38,096             29,998

Instructions

Question (a) draft a vertical analysis of the 2017 income statement data for Duke Company and Lord Company

Question B. Comment on the relative profitability of the companies by computing the 2017 return on assets and the return on common stockholders' equity for both companies