Common-Size Analyses

Meagley Company presents the following condensed income statement and balance sheet information for 2016 and 2017.

Income Statements
	For Years Ended December 31
	2017		2016
Sales (net)	$100,000		$90,000
Cost of goods sold	(60,000)		(51,000)
Gross profit	$40,000		$ 39,000
Operating expenses	(21,300)		(21,900)
Interest revenue	1,500		1,400
Interest expense	(3,700)		(2,500)
Income before income taxes	$16,500		$16,000
Income tax expense	(5,000)		(4,700)
Net income	$11,500		$11,300
Earnings per share	$1.92		$1.95

Balance Sheets
	December 31,
	2017		2016
Cash	$3,000		$2,000
Receivables (net)	7,000		8,000
Inventories	11,000		12,000
Long-term investments (bonds)	20,000		15,000
Property and equipment (net)	79,000		63,000
Total Assets	$120,000		$100,000
Current liabilities	$10,000		$11,400
Bonds payable, 10%	37,000		25,000
Common stock, $2 par	12,000		11,600
Additional paid-in capital	21,000		19,500
Retained earnings	40,000		32,500
Total Liabilities and Shareholders' Equity	$120,000		$100,000

Required:

Based on the preceding information for MEAGLEY Company, prepare common-size income statements for 2017 and 2016. Round Earnings per Share computation to two decimal places. If required, round the percentage computations to one decimal place. Do not enter a percent sign. Use a minus sign to enter any subtractive numbers.

MEAGLEY COMPANY
Comparative Income Statements (Common-Size Analysis)
For Years Ended December 31,
	2017 Amount	2017 %	2016 Amount	2016 %
Sales (net)	$		$
Cost of goods sold
Gross profit	$		$
Operating expenses
Interest revenue
Interest expense
Income before income taxes	$		$
Income tax expense
Net income	$		$
Earnings per share	$		$

Feedback

Based on the preceding information for MEAGLEY Company, prepare common-size balance sheets for 2017 and 2016. If required, round the percentage computations to one decimal place. Do not enter a percent sign.

MEAGLEY COMPANY
Comparative Balance Sheet (Common-Size Analysis)
December 31,
	2017 Amount	2017 %	2016 Amount	2016 %
Cash	$		$
Receivables (net)
Inventories
Long-term investments (bonds)
Property and equipment (net)
Total assets	$		$
Current liabilities	$		$
Bonds payable, 10%
Common stock, $2 par
Premium on common stock
Retained earnings
Total liabilities and stockholders' equity	$		$

Feedback

Do your analyses reveal any trends in the company's operations and financial position? Explain.