Question 1
Comparative statement data for Whispering Company and MetlockCompany, two competitors, appear below. All statement of financialposition data are as of December 31, 2017, and December 31,2016.
| | Whispering Company | | Metlock Company |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Net sales | | Ă‚ÂŁ1,504,113 | | | | Ă‚ÂŁ339,668 | | |
| Cost of goods sold | | 1,023,277 | | | | 236,886 | | |
| Operating expenses | | 277,402 | | | | 76,916 | | |
| Interest expense | | 7,970 | | | | 2,320 | | |
| Income tax expense | | 61,839 | | | | 7,410 | | |
| Plant assets (net) | | 596,402 | | Ă‚ÂŁ572,775 | | 143,285 | | Ă‚ÂŁ 128,013 |
| Current assets | | 408,279 | | 385,366 | | 85,117 | | 81,019 |
| Share capital—ordinary, £5 par | | 582,000 | | 582,000 | | 140,000 | | 140,000 |
| Retained earnings | | 253,932 | | 216,973 | | 52,054 | | 44,504 |
| Non-current liabilities | | 102,775 | | 84,601 | | 15,746 | | 11,897 |
| Current liabilities | | 65,974 | | 74,567 | | 20,602 | | 12,631 |
Prepare a vertical analysis of the 2017 income statement datafor Whispering Company and Metlock Company in columnar form.(Round percentages to 1 decimal place, e.g. 12.1%.Enter all percentages as positive numbers.)
Compute the return on assets and the return on ordinaryshareholders’ equity for both companies. (Roundpercentages to 1 decimal place, e.g. 12.1%.) |
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