Comparative income statement data for Carla Vista Inc. and Martinez Ltd., two competitors, are shown...
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Accounting
Comparative income statement data for Carla Vista Inc. and Martinez Ltd., two competitors, are shown below for the year ended December 31, 2021.
Carla Vista
Martinez
Net sales
$1,920,000
$563,000
Cost of goods sold
1,102,080
356,942
Gross profit
817,920
206,058
Operating expenses
556,800
87,828
Profit from operations
261,120
118,230
Interest expense
6,960
1,252
Profit before income tax
254,160
116,978
Income tax expense
76,248
29,245
Profit
$177,912
$87,733
Additional information:
Average total assets
$894,000
$250,563
Average total shareholders equity
751,000
212,808
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Solve
1) Using vertical analysis, calculate the percentage of the base amount of the income statement for each company. (Round answers to 1 decimal place, e.g. 12.5%.)
2) Calculate the gross profit margin, profit margin, asset turnover, return on assets, and return on equity ratios for 2021 for each company. (Round answers to 1 decimal place, e.g. 12.5 or 12.5%.)
Answer & Explanation
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