Comprehensive Common Size Statement Analysis (LO3, 4)

After reviewing the financial analyses conducted in Problem A-25, the managers of Seneca Company are still uncertain about the performance of the company during 2012. They believe that common size statements might provide additional insights as to the company’s performance.

Required

a. Using the data pertaining to Seneca Company from Problem A-25, prepare common size statements and evaluate the company’s performance in 2012 as compared to 2011. For the balance sheets, use total assets as the base; for the income statements, make one set using sales of each year as the base for that year and another set using the year 2011 as the base for both years.

b. Comment on the condition of Seneca drawing on the common sizé statements.

 LO.1