Comparative income statement data for Manitou Ltd. and Muskoka Ltd., two competitors, are shown below for the year ended June 30, 2014.

Instructions
(a) Using vertical analysis, calculate the percentage of the base amount for each year of the income statement for each company.
(b) Calculate the gross profit margin, profit margin, asset turnover, return on assets, and return on equity ratios for 2014 for each company.
(c) Using the information calculated in (a) and (b), compare the profitability of each company.
(d) Is your comparison in (c) an intra company comparison or an intercompany comparison? Explain.
Taking It Further
How is your assessment of profitability affected by the differing sizes of the two companies, if at all? Explain.

$1,400,000 Cost of goods sold Operating expenses Profit from operations 100,000 Profit before income tax Income tax expense Additional information: Average total assets Average total shareholders' equity $1,725,000