Comparative statement data for Lionel Company and Barrymore Company, two competitors, appear below. All balance sheet data are as of December 31, 2013, and December 31, 2012.

Instructions

(a) Prepare a vertical analysis of the 2013 income statement data for Lionel Company and Barrymore 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.

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Lionel Company Barrymore Company 2013 2013 2012 2012 $1,549,035 1.080,490 $339,038 Net sales Cost of goods sold Operating expenses Interest expense Income tax expense Current assets 241.000 302.275 79,000 8,980 2.252 54,500 6,650 $ 79,467 325,975 $312,410 83,336 Plant assets (net) 521.310 500,000 139,728 125.812 75,815 Current liabilities 65,325 35,348 30,281 108.500 Long-term liabilities Common stock. $10 par Retained earnings 90,000 29,620 25.000 500,000 500,000 120,000 120,000 146,595 173,460 38,096 29,998