Here are comparative statement data for Blue Company and Gray Company, two competitors. All balance sheet data are as of December 31, 2010, and December 31, 2009.

Instructions
(a) Prepare a vertical analysis of the 2010 income statement data for Blue Company and Gray Company.
(b) Comment on the relative profitability of the companies by computing the 2010 return on assets and the return on common stockholders' equity ratios for both companies.

Blue CompanyGray Company 2010 2009 2010 2009 Net sales Cost of goods sold Opcrating expenses Interest expensc Incomc tax expensc Current assets Plant assets (net) Current labilities Long-term liabilities $546,000 S1,849,035 1,080,490 250,000 6,800 62,030 278,000 82,000 1,600 31,000 325,975 S312,410 500,000 75,815 90,000 83,336 79,467 125,812 30,281 25,000 9 526,800 66,325 13,990 139,728 35,348 29,620 Common stock, $10 par Retained earnin 500,000 172,460 500,000 146,595 120,000 38,096 120,000 29,998 gS