P15-1 Comparative statement data for Douglas Company and Maulder Company, two competitors,

Price: $2.50


P15-1 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

Instructions

(a) Prepare a vertical analysis of the 2009 income statement data for Douglas Company and
Maulder 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 ratios for both companies