Problem -
Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appear below. All balance sheet data are as of December 31, 2017, and December 31, 2016.
|
|
Farris Company
|
Ratzlaff Company
|
|
|
2017
|
2016
|
2017
|
2016
|
|
Net sales
|
$1,520,000
|
|
$339,000
|
|
|
Cost of goods sold
|
1,030,000
|
|
240,600
|
|
|
Operating expenses
|
301,100
|
|
80,000
|
|
|
Interest expense
|
8,200
|
|
2,300
|
|
|
Income tax expense
|
53,500
|
|
7,000
|
|
|
Current assets
|
322,000
|
$310,600
|
82,600
|
$79,200
|
|
Plant assets (net)
|
519,900
|
498,200
|
140,100
|
124,500
|
|
Current liabilities
|
65,000
|
75,000
|
35,800
|
31,400
|
|
Long-term liabilities
|
108,000
|
90,200
|
28,600
|
25,200
|
|
Common stock, $10 par
|
497,000
|
497,000
|
117,000
|
117,000
|
|
Retained earnings
|
171,900
|
146,600
|
41,300
|
30,100
|
Compute the return on assets and the return on common stockholders' equity ratios for both companies.